Asia stocks slip as oil, bond yields weigh on markets

September 29, 2026 (MLN): Asian stocks came under pressure on Tuesday as a sharp rise in global bond yields and higher oil prices weighed on investor sentiment, while markets awaited a potential interest rate hike from the Reserve Bank of Australia (RBA).

According to Reuters, the benchmark 10-year US Treasury yield climbed above 5.27% overnight, its highest level in 19 years, while the two-year yield moved close to 5%. The rise in yields has strengthened expectations that the US Federal Reserve could raise interest rates further through the middle of next year.

Higher bond yields increase borrowing costs for governments and companies and can also reduce the relative appeal of equities, particularly high-growth technology stocks.

Japan's Nikkei 225 fell 1.27% to 65,038.74, while South Korea's KOSPI declined 1% to 6,820.53. Hong Kong's Hang Seng Index dropped 0.63% to 24,486.52, while Taiwan's benchmark index fell 0.62%.

India's Nifty 50 declined 0.81%, Malaysia's index dropped 0.95% and Singapore's Straits Times Index slipped 0.43%. New Zealand's NZX 50 fell 1.06%.

China's mainland markets were more resilient, with the Shanghai Composite edging up 0.08% and the Shenzhen Composite rising 0.41%. Australia's ASX 200 also gained 0.08%.

Oil prices added to inflation concerns as uncertainty surrounding the Middle East conflict continued. Brent crude was trading around $107.17 a barrel, up 1.8%, while US crude gained 1.73% to around $94.20.

Reuters reported that Brent crude remained elevated after efforts to ease the US-Iran conflict showed no clear breakthrough. Higher energy prices have raised concerns that inflation could remain persistent, complicating the outlook for central banks.

RBA decision in focus

Investors were also focused on the RBA's monetary policy decision, with markets pricing in a 25-basis-point rate increase to 4.60%.

The decision would take Australia's policy rate to its highest level in nearly 15 years. Investors are expected to closely examine Governor Michele Bullock's guidance on whether further tightening may be required, particularly as higher oil prices add to inflation risks.

The Australian dollar was broadly steady at around $0.701, while the US dollar strengthened against several Asian currencies.

The Japanese yen traded near 157.44 per dollar, while the US dollar was quoted around 6.705 yuan against the Chinese currency.

Technology stocks remain under pressure

Technology shares also remained weak as investors assessed the sustainability and cost of the artificial intelligence investment boom.

Reuters reported that Chinese technology stocks remained fragile after US plans to restrict Chinese components used in data centres weighed on the sector.

The Hang Seng Tech Index also came under pressure, while SoftBank Group declined in Japan.

Investors were meanwhile assessing Anthropic's IPO prospectus, which highlighted both the rapid growth and enormous capital requirements of the AI industry. According to Reuters, Anthropic's revenue rose nearly 12-fold to about $4.6 billion in 2025, while the company reported a $42 billion net loss, including a $34 billion accounting charge, and plans substantial future spending on cloud and infrastructure.

In the US, Nvidia's shares provided some support to technology stocks after the chipmaker added $150 billion to its existing share-repurchase programme. Reuters said the move helped limit losses in the Nasdaq, which still ended the previous session 0.9% lower.

Investors are now looking ahead to US inflation, manufacturing and labour-market data for further clues about the Federal Reserve's interest-rate path.

For Asian markets, the combination of elevated oil prices, rising bond yields and expectations of tighter monetary policy has added another layer of uncertainty as investors assess the outlook for economic growth and corporate earnings.

Copyright Mettis Link News