Asia Shares Dip as High Yields Test Valuations
Asian shares edged lower on Monday as high Treasury yields challenged lofty Wall Street equity valuations while underpinning the U.S. dollar near multi-month peaks.
Volumes were light with the New Year holiday looming and a rather bare data diary this week. China has the PMI factory surveys out on Tuesday, while the U.S. ISM survey for December is due on Friday.
MSCI's broadest index of Asia-Pacific shares outside Japan, opens new tab dipped 0.2%, but is still 16% higher for the year. Japan's Nikkei, opens new tab eased 0.2%, but is sitting on gains of 20% for 2024.
South Korea's main index has not been so fortunate, having run into a storm of political uncertainty in recent weeks, and is saddled with losses of more than 9% for the year. It was last off 0.35%.
S&P 500 futures and Nasdaq futures were both off 0.1%. Wall Street suffered a broad-based sell off on Friday with no obvious trigger, though volumes were just two-thirds of the daily average. .
The S&P 500 is still up 25% for the year and the Nasdaq 31%, which is stretching valuations when compared to the risk-free return of Treasuries. Investors are counting on earnings per share growth of just over 10% in 2025, versus a 12.47% expected rise in 2024, according to LSEG data.
Source : Reuters
