Global Market: Nikkei falls as oil surge, global bond selloff rattle markets

Japan’s Nikkei share average fell sharply on Tuesday as a global surge in bond yields and rising oil prices weighed on investor sentiment, according to a report by Reuters.

The benchmark Nikkei 225 fell 1.23% to 65,070.58 in early trading, putting it on course for a second straight decline. The broader Topix dropped 1.75% to 4,040.16, according to Reuters.

The decline followed an overnight selloff in U.S. equities, where rising oil prices and Treasury yields fuelled concerns about inflation and the prospect of monetary policy remaining tight. Japanese government bond yields were also hovering near multi-decade highs.

Also Read | Global Market Today: Asian shares mixed as surging oil, Treasury yields weigh

U.S. and Iranian officials held separate discussions with mediators on Monday as part of renewed efforts to end a seven-month war that has roiled energy markets.

The report stated that developments surrounding the conflict have kept investors focused on the outlook for oil prices and inflation.

Higher interest rates have also raised concerns about valuations of AI-related shares, which have been a major driver of Japanese equities. Reuters reported that investors were increasingly viewing some AI-linked stocks as relatively expensive as borrowing costs and bond yields rise.

Decliners heavily outnumbered gainers on the Nikkei, with 199 stocks falling compared with 26 advancing.

Also Read | US stocks: US market falls as higher oil prices, Treasury yields weigh

NEXON was the biggest percentage loser, tumbling 14.57%. Idemitsu Kosan fell 5.10%, while Chubu Electric Power declined 4.46%.

Tokai Carbon was the top gainer, rising 3.29%, followed by Screen Holdings, which advanced 2.65%, and Lasertec, up 2.48%.

Investors remained focused on oil prices, global bond yields and interest rate expectations, as these factors continue to shape the outlook for Japanese equities.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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