Asian stocks moved higher in volatile trading on Tuesday as a record close for the Nasdaq provided support.
However, elevated U.S. Treasury yields and high oil prices kept risk appetite in check across the region.
Wall Street Gains Support Asian Markets
Some Asian markets followed a positive session on Wall Street.
The Nasdaq Composite climbed 1.1% on Monday to finish at a record high. The S&P 500 gained 0.7%, while the Dow Jones Industrial Average advanced 0.2%.
U.S. stock index futures were also slightly higher in early Tuesday trading.
Japan and Hong Kong Stocks Move Higher
Japan’s Nikkei 225 gained around 1.1%, while the broader TOPIX index rose 1%.
In Hong Kong, the Hang Seng Index advanced 0.5%, while the Hang Seng TECH Index added 0.7%.
South Korea’s KOSPI moved in the opposite direction, falling around 1% after initially opening higher.
Samsung Electronics and SK Hynix dropped between 1.5% and 3%, weighing on the broader market.
China Markets Remain Closed for Holiday
Mainland Chinese financial markets remained closed for the National Day and Golden Week holidays.
Trading is scheduled to resume on Thursday, Oct. 8.
The closure kept regional trading volumes relatively subdued.
Treasury Yields Reach Multi-Year Highs
Bond yields remained one of the biggest risks for equity markets.
Japan’s 10-year government bond yield climbed to 3.122%, its highest level since 2022.
The move followed a rise in U.S. Treasury yields and growing expectations that the Bank of Japan could tighten monetary policy further.
The U.S. 10-year Treasury yield touched 5.349% overnight, reaching its highest level since 2002.
Meanwhile, the 30-year Treasury yield climbed to 5.703%.
Higher bond yields can pressure stocks by increasing borrowing costs and making fixed-income investments more attractive compared with riskier assets.
High-growth technology stocks are often particularly sensitive to rising yields.
Australia and India Stocks Gain
Elsewhere in Asia, Australia’s S&P/ASX 200 rose 0.6%.
Singapore’s Straits Times Index was broadly unchanged.
India’s Nifty 50 gained around 0.5%, supported by strength in financial shares.
RBI and Fed Policy in Focus
Investors are now watching the Reserve Bank of India’s policy decision, due on Wednesday.
Markets are expecting a 25-basis-point interest rate increase.
Traders are also waiting for the minutes from the Federal Reserve’s September meeting.
The minutes could provide more information on how policymakers view inflation and the timing of any future rate increases.
Oil Prices Remain a Key Market Risk
Oil prices continued to influence market sentiment.
Brent crude traded near $100 a barrel after dropping 1.9% on Monday.
Prices came under pressure as Middle East oil exports improved and the Group of Seven pledged to increase supplies.
However, investors remained cautious about the risk of renewed disruptions linked to tensions between the United States and Iran.
