AP
Beijing, Mar. 20:Global stock markets followed Wall Street lower on Friday after rising U.S. bond yields dampened buying enthusiasm driven by the Federal Reserve’s promise of low interest rates.
London and Frankfurt opened lower and Shanghai, Tokyo and Hong Kong also retreated.
Overnight, Wall Street’s benchmark S&P 500 index closed down 1.5%, putting it on track for its first weekly loss in three weeks. Stocks slipped after bond yields rose, which can prompt investors to shift money out of stocks.
A day earlier, the S&P 500 hit a new high after the Fed promised to keep its key interest rate near zero through 2023 even as it forecast inflation will pick up.
“The rapid rise in long-end U.S. yields has spooked investors,” Stephen Innes of Axi said in a report. The sell-off “caught some investors wrong-footed” after the Fed’s pledge.
In early trading, the FTSE 100 in London fell 1.2% to 6,696.57. The DAX in Frankfurt lost 0.6% to 14,684.63 while the CAC in Paris declined 0.7% to 6,020.89.
On Wall Street, the future for the S&P 500 index was up 0.3% while that for the Dow Jones Industrial Average was up 0.2%.
On Thursday, the Dow lost 0.5% and the Nasdaq slid 3.1%.
In Asia, the Shanghai Composite Index tumbled 1.7% to 3,404.66 and the Nikkei 225 in Tokyo lost 1.4% to 29,792.05. The Hang Seng in Hong Kong retreated 1.4% to 28,990.94.
The Kospi in Seoul shed 0.9% to 3,039.53 and Sydney’s S&P-ASX 200 gave up 0.6% to 6,708.20.
India’s Sensex advanced 0.5% to 49,474.99. New Zealand and Singapore gained while Bangkok and Jakarta retreated.
Also Friday, Japan’s central left its easy monetary policy and inflation goal of 2% unchanged but widened the band in which long-term interest rates will be allowed to rise or fall around its target to 0.25% from 0.2%.
Investors are swinging between hopes the rollout of coronavirus vaccines will allow global business and travel to resume and fears of possible inflation caused by government stimulus spending and easy credit.
The market’s pullback undercut some of Wednesday’s gains, when the S&P 500 and Dow hit all-time highs after the Federal Reserve said U.S. economic growth should rebound to 6.5% this year — the strongest since the 1980s — and inflation will climb above 2% for the first time in years.
Chairman Jerome Powell said the Fed will keep rates low even as inflation accelerates. Central banks usually try to restrain price rises by hiking rates. But Fed officials have said the U.S. economy will be allowed to “run hot” to avoid derailing a recovery.
Stocks fell back Thursday after the yield on the 10-year U.S. Treasury note, or the difference between its market price and the payout if held to maturity, widened to 1.72%, its highest since January 2020.
A higher yield can make bonds more attractive, drawing money out of stocks, especially high-priced tech giants that powered last year’s market rebound. Apple shares fell 3.4%, Microsoft lost 2.7% and Tesla slumped 6.9%.
The S&P 500 fell to 3,915.46. The Dow Jones Industrial Average lost 0.5% to 32,862.30. The Nasdaq slid 409.03 points to 13,116.17.
In energy markets Friday, benchmark U.S. crude added 4 cents to $60.10 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the basis for international oil prices, shed 1 cent to $63.27 per barrel in London.
The dollar edged down to 108.64 from Thursday’s 109.00. The euro advanced to $1.1932 from $1.1915.
in the city’s Hlaing township, with another barricade burning fiercely in the middle of a residential area. One resident, who did not want to be named for fear of retaliation, told The Associated Press that protesters set them alight after hearing that a column of police trucks was on its way.
Building barricades – and occasionally burning them – are now established tactics by opponents of the junta all over the country to impede police and army movement. The barriers also provide some protection from the now-frequent use of live ammunition against them.
On Wednesday, at least two people were shot dead in Kalay in northwestern Myanmar, according to media and social media posts that included photos of the victims. More than 200 people have been killed by security forces since the coup, according to credible tallies.
On Thursday, the head of the junta attended an online meeting of military leaders from the Association of Southeast Asian Nations, or ASEAN.
It was a rare appearance by senior Gen. Min Aung Hlaing before an international gathering since the coup.
ASEAN's chairman earlier this month called for an end to violence in Myanmar and for talks to try to reach a peaceful settlement.