Asian stocks step back from record highs on rising bond yield, weak US data

 

MSCI's broadest index of Asia Pacific shares outside of Japan was last down 0.1per cent at 733.67 from a record high of 745.89 touched on Thursday

By Swati Pandey

SYDNEY (Reuters) - Asian stocks pulled back from all-time peaks on Friday as higher longer-dated bond yields and underwhelming U.S. data dented investor confidence in a faster economic recovery from the COVID-19 pandemic, while gold hit a seven-month trough.

MSCI's broadest index of Asia Pacific shares outside of Japan was last down 0.1% at 733.67 from a record high of 745.89 touched on Thursday.

The index is on track for a small weekly loss after two consecutive weeks of gains.

Since the start of the year, the index has surged nearly 10.5% largely led by easy monetary and fiscal policies around the world.

On Friday, Australia's benchmark S&P/ASX 200 index was down 0.8% while Japan's Nikkei fell 0.4%.

Chinese shares started in the red with the blue-chip CSI300 off 0.6%.

"The recent move up in longer dated core yields appears to be weighing on equity investors' mind," said Rodrigo Catril, forex strategist at National Australia Bank.

Core bond yields have pushed higher globally led by the so-called "reflation trade" where investors wager on a pick-up in growth and inflation. Successful coronavirus vaccine roll-outs so far and hopes of massive fiscal spending under U.S. President Joe Biden have spurred reflation trades.