Asian Shares Retreat On Rate-hike Concerns

(RTTNews) - Asian stocks declined on Friday after U.S. Treasury yields hit one-year highs, prompting traders to hike their bets on a Federal Reserve rate hike this year.

Rising oil prices dented sentiment as attacks on one ship and the seizure of another around the Strait of Hormuz stoked concerns about energy supplies.

The Trump-Xi summit has so far produced warm words but yielded little progress on the war in Iran.

After a high-stakes meeting, U.S. President Donald Trump claimed that China intends to purchase U.S. oil and soybeans. He also said that the Chinese President has assured him that Beijing would not provide military equipment to Iran.

The dollar rose alongside higher U.S. Treasury yields and was on track for its biggest weekly gain in more than two months.

Gold fell nearly 2 percent to $4,579 an ounce while Brent crude futures traded above $107 a barrel after Trump warned Iran to make a deal or face "annihilation".

China's Shanghai Composite index tumbled 1.02 percent to 4,135.39 after U.S. Trade Representative Jamieson Greer told Bloomberg TV that Washinton's strict chip export controls against China were "not a major topic of discussion" during bilateral talks.

Hong Kong's Hang Seng index slumped 1.62 percent to 25,962.73 as the Trump-Xi summit concluded with minimal deals.

Japanese markets lost ground on inflation and interest-rate concerns after data showed the producer price index jumped 4.9 percent in April on higher energy costs, marking the fastest annual increase since May 2023.

The Nikkei average fell 1.99 percent to 61,409.29 on speculation that the Bank of Japan will respond with rate hikes to limit fallout from rising energy prices. The broader Topix index settled 0.39 percent lower at 3,863.97.

Tech stocks suffered heavy losses due to profit taking, with Advantest tumbling 7.9 percent and Tokyo Electron losing 1.8 percent.

Seoul stocks plummeted after data showed South Korea's export prices surged 40.8 percent year-on-year in April, putting immense pressure on the Bank of Korea to raise interest rates at its next meeting in a few weeks.

The Kospi average topped 8,000 points for the first time before coming under significant selling pressure to end 6.12 percent lower at 7,493.18.

Investors took profits from large-cap semiconductor and technology shares, with Samsung Electronics plunging 8.6 percent and SK Hynix falling 7.7 percent.

Australian markets ended marginally lower as mining stocks fell after days of record gains, offsetting a continued recovery in bank stocks following Tuesday's federal budget.

The benchmark S&P/ASX 200 slid 0.11 percent to 8,630.80 while the broader All Ordinaries index closed 0.16 percent lower at 8,870.60.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index dropped 0.46 percent to 12,965.01 after a survey showed manufacturing activity growth in the country slowed to a six-month low in April as a result of increased costs and disrupted supply chains.

Overnight, U.S. stocks hit new records, driven by continued strength in AI-related companies, solid economic data and optimism surrounding the U.S.-China summit in Beijing.

The tech-fueled rally rolled on as Cisco reported upbeat Q3 results and U.S. authorities temporarily allowed around 10 Chinese companies to buy Nvidia's advanced H200 AI chips.

In economic news, retail sales extended their advance in April, and weekly jobless claims increased moderately last week, underscoring resilience.

Fed officials continued to emphasize inflation risks, with Kansas City Fed President Jeffrey Schmid calling inflation the most "pressing risk" to the U.S. economy.

While the tech-heavy Nasdaq Composite and the S&P 500 surged by 0.9 percent and 0.8 percent, respectively to reach new record closing highs, the Dow gained 0.8 percent to close above 50,000 for the first time in three months.