Asian markets follow Wall St lower after Fed bump

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A woman wearing a protective mask walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Friday, March 19, 2021, in Tokyo. Asian stock markets followed Wall Street lower on Friday after rising U.S. bond yields pulled stocks lower, dampening enthusiasm driven by the Federal Reserve's promise of low interest rates. (AP Photo/Eugene Hoshiko)

BEIJING – Asian stock markets followed Wall Street lower on Friday after rising U.S. bond yields dampened buying enthusiasm driven by the Federal Reserve's promise of low interest rates.

Shanghai, Tokyo, Hong Kong and Sydney retreated.

Overnight, Wall Street's benchmark S&P 500 index closed down 1.5%, putting it on track for its first weekly loss in three weeks. Stocks slipped after bond yields rose, which can prompt investors to shift money out of stocks.

A day earlier, the S&P 500 hit a new high after the Fed promised to keep its key interest rate near zero through 2023 even as it forecast inflation will pick up.

“The rapid rise in long-end U.S. yields has spooked investors,” Stephen Innes of Axi said in a report. The sell-off “caught some investors wrong-footed” after the Fed's pledge, he said.

The Shanghai Composite Index sank 1% to 3,426.59 and the Nikkei 225 in Tokyo lost 0.8% to 29,961.75. The Hang Seng in Hong Kong retreated 1.4% to 29,015.89.

The Kospi in Seoul shed 1% to 3,035.47 while Sydney's S&P-ASX 200 gave up 0.3% to 6,728.70. New Zealand retreated while Singapore gained.

Investors are swinging between hopes the rollout of coronavirus vaccines will allow global business and travel to resume and fears of possible inflation caused by government stimulus spending and easy credit.