Asia shares went down on Monday and suffered their sharpest blow since June as investors were confounded by the surging bond yields and talk the Federal Reserve might be serious with the lifting of U.S. interest rates as early as next week.
The Japanese gauge index Nikkei 225 shed 1.51 percent as the safe haven yen consolidated and selling in bonds drove yields on 20-year JGB’s to the highest since March. Reports said that the Bank of Japan was seeking ways to steepen the Japanese yield curve.
Australian stock ASX 200 was down by 2.25 percent, weighted heavily by the energy sector, which was down 3.62 percent, while 3.18 percent was shed by the materials sub index, and the financial sector, which was lower by 2.23 percent.
Mainland China markets followed the fall and slumped at the open: The Shenzhen composite shed 1.836 percent and the Shanghai composite slid down 1.13 percent. In Hong Kong, the Hang Seng index slid 2.49 percent.
In commodities, oil prices extended Friday’s 4 percent fall in Asia after the oil drilling increased in the United States as shown on the reports, indicating that producers can work profitably around prevailing levels and bring on new supply.
Oil prices fall, U.S drillers adds rigs
Oil prices slid down about 1.5 percent on Monday after U.S. oil drillers added rigs and adapted to cheaper crude, with ventures cutting positions betting on more price hikes.
Brent crude oil futures LCOc1, the international benchmark, were trading at $47.19 per barrel at 06:45 GMT (02:45 a.m. EDT) down by 82 cents, or 1.71 percent from the previous settlement.
U.S. benchmark West Texas Intermediate crude futures CLc1 were down 86 cents, or 1.87 percent, costing $45.02 per barrel.
The price falls on Monday and Friday were a result of the increase in oil drilling activity in the United States as said by traders. It indicated that producers can operate profitably around current levels.
U.S. drillers added oil rigs for a tenth week in the past 11, as said by Baker Hughes. It was the longest streak without rig cuts since 2011.
The decline in price of oil that is nearly six-percent since September 8 partly reverses a 10-percent rally seen early in the month to around $50 per barrel.
Traders said that they are still closely eyeing statements regarding the potential freezing of oil output, although a wide agreement to knowingly rein in oversupply was not currently expected.