Asia-Pacific markets trade lower as investors keep an eye on rising rates and Covid

Pedestrians are reflected in a window as they walk past an electronic stock board at the ASX Ltd. exchange centre in Sydney, Australia, on Thursday, Feb. 14, 2019.
David Moir | Bloomberg | Getty Images

SINGAPORE — Asia-Pacific markets fell on Monday as investors kept an eye on the coronavirus pandemic and rising interest rates in the U.S.

In South Korea, the Kospi index fell 1.18% while the Kosdaq was down 1.7%.

Australia’s benchmark ASX 200 traded down 0.1%, after retracing some of its earlier losses. The heavily weighted financials subindex slid 0.08%, but the energy and materials indexes advanced 1.29% and 1.25%, respectively.

Shares of major miners rose: Rio Tinto added 1.86%, Fortescue was up 2.75% and BHP added 1.89%.

Japan’s markets are closed for a public holiday.

Monday’s session followed a mixed session in Asia on Friday while stateside, the three major stock averages all declined.

The 10-year Treasury yield rose as high as 1.8% on Friday following the release of the December nonfarm payrolls report, where 199,000 jobs were added for the month. That fell significantly short of the market’s expectation for 422,000 jobs.

Last week, minutes from the U.S. Federal Reserve’s December meeting indicated that officials are ready to aggressively dial back policy support. It showed that the central bank is planning to shrink its balance sheet in addition to hiking interest rates.

Elsewhere, Covid cases have continued to rise sharply around the globe following the emergence of the highly transmissible omicron variant. Places like the U.S., Australia and U.K. have reported record number of cases in recent weeks.

“Early studies indicate that while Omicron is far more infectious than Delta, it is, mercifully, less likely to cause hospitalisations, and booster vaccines further reduce the risk of hospitalisation,” ANZ Research analysts said in a morning note.

“Unfortunately, as pandemic-induced supply shortages continue to proliferate, it’s clear that the inflation rollercoaster ride isn’t over,” they added.

Currencies and oil

In the currency market, the dollar index traded up 0.09% at 95.802 against a basket of its peers.

The Japanese yen changed hands at 115.62 per dollar while the Australian dollar traded up 0.11% at $0.7186.

Oil prices fell Monday during Asian trading hours: U.S. crude was down 0.44% at $78.55 a barrel.

“Geopolitical tensions are likely to impact commodity markets this week,” the ANZ Research analysts said. “Gas markets are on edge as tensions remain high in Ukraine, while unrest in Kazakhstan is threatening supply of key metals.”

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