Asian Shares Retreat On Worries Over Rising Yields

(RTTNews) - Asian stocks tumbled on Friday as escalating Middle East tensions and a continued surge in oil prices clouded the outlook for global economic growth.

Gold scaled a three-month peak on safe-haven bids amid fears the Israel-Hama war may escalate into something of a broader regional crisis.

Israeli Defense Minister Yoav Gallant told troops gathered at the Gaza border on Thursday that they would soon see the Palestinian enclave "from inside."

The bond market selloff pushed the benchmark U.S. Treasury yield to 5 percent after Federal Reserve Chairman Jerome Powell reiterated his commitment to getting inflation down to the central bank's 2 percent target, giving little clarity on how long investors have to wait for rate cuts.

Oil prices were on track for a second straight weekly gain after the U.S. Department of Energy indicated that it would buy 6 million barrels of crude oil.

Chinese shares ended lower after the People's Bank of China kept its benchmark lending rates unchanged at the monthly fixing, as widely expected.

China's Shanghai Composite index fell 0.74 percent to 2,983.06 while Hong Kong's Hang Seng index settled 0.72 percent lower at 17,172.13.

Japanese shares fell on risk aversion after reports emerged that U.S. troops are being targeted at several military bases across Iraq and Syria and a U.S. Navy warship destroyed cruise missiles and drones fired toward Israel by Houthi rebels in Yemen.

Traders largely shrugged off data showing that Japan's core inflation slid below 3 percent for the first time in more than a year.

The Nikkei average dropped 0.54 percent to 31,259.36 while the broader Topix index closed down 0.38 percent at 2,255.65.

Heavyweights Fast Retailing and SoftBank Group fell 1.5 percent and 2 percent, respectively. Daiichi Sankyo soared 14.4 percent after signing a $5.5 billion deal with Merck to jointly develop three precision cancer drug candidates.

Seoul stocks hit a seven-month low, with the Kospi average ending down 1.69 percent at 2.375 - marking the lowest level since March 14 on Fed rate hike woes. Tech and battery stocks led losses.

Australian stocks fell ahead of key inflation data due next week. The benchmark S&P/ASX 200 and the broader All Ordinaries index both slipped around 1.16 percent to close at 6,900.70 and 7,089.70, respectively.

Banks and miners led losses, while energy stocks saw modest gains as oil prices climbed on fears of potential supply disruptions from the Middle East.

Liontown Resources plummeted almost 32 percent after announcing a discounted share placement.

Across the Tasman, New Zealand's benchmark S&P/NZX 50 index fell 1.27 percent to 10,994.08.

U.S. stocks fluctuated before closing firmly in the red overnight and Treasury yields hit 16-year highs after Fed Chair Jerome Powell warned that inflation is "still too high" and additional monetary policy tightening may be needed.

Economic reports painted a mixed picture, with jobless claims falling to a nine-month low last week while a measure of existing home sales dropped to a 13-year low in September.

The Dow gave up 0.8 percent, the S&P 500 shed 0.9 percent and the tech-heavy Nasdaq Composite lost 1 percent.