Shares in Asia slid while Treasury yields and the dollar rose in a sign investors are yet to fully recalibrate interest rate expectations. Equity benchmarks for Japan, Australia and China all fell, while a decline in South Korean equities dragged the Kospi Index to a six-month low.
Hong Kong’s Hang Seng Index also decreased, falling as much as 0.9%, its lowest level since late November. A gauge of Chinese property developers dropped after slumping by the most in nine months on Monday amid fresh signs of turmoil for the sector.
China Evergrande Group missed a debt payment and former executives were detained. That added to fears about the sector’s debt pile and compounded concern that global growth will stall as the economic engine of the world’s second-biggest economy sputters.
Treasury yields continued to climb after the 10-year rate added 11 basis points to set a 16-year high on Monday to trade above 4.54%. The momentum flowed into Asia, with Australian and New Zealand yields also rising.
The momentum flowed into Asia, with Australian and New Zealand yields also rising. Jamie Dimon, chairman and chief executive of JPMorgan Chase & Co., floated the idea US interest rates could reach 7%, a worst-case scenario that could catch consumers and businesses off-guard.