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High yields temper equity gains

Multi-year highs in bond yields tempered the mood across Asian equity markets on Tuesday, with gains in Japan and Hong Kong contrasting with losses in South Korea. Wall Street finished Monday higher as cheaper oil and signs of diplomatic headway between Washington and Tehran supported sentiment. European equities made limited progress, held back by worries about government finances and persistently expensive energy. Mainland Chinese exchanges remain shut on Tuesday for the National Day and Golden Week holidays.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Zinsen

Japan’s Nikkei 225 rose 1.1% on Tuesday, while Hong Kong’s Hang Seng and Australia’s S&P/ASX 200 each rose 0.6%, supported by Wall Street’s gains, although high bond yields and oil prices limited investor appetite for risk. South Korea’s KOSPI fell 1.1%, with chipmakers Samsung Electronics and SK Hynix losing between 1% and 3%, while mainland Chinese markets remained closed for public holidays. Japan’s ten-year government bond yield moved above 3.1%, its highest since 2022, after the equivalent US Treasury yield moved beyond 5.3%, a level last seen in 2002. Brent crude oil futures traded just above USD 100 per barrel, up about 0.5%, after falling 1.9% on Monday. Gold declined 0.4% to around USD 4120 per ounce, while bitcoin slipped 0.1% to around USD 85,600.

World Bank lifts East Asia growth forecast

The World Bank raised its growth forecast for East Asia and the Pacific to 4.5% for 2026 on Tuesday, up from 4.2% projected in April, as exports linked to artificial intelligence (AI) supported the region’s economies. It expects growth to moderate to 4.4% in 2027 and 4.3% in 2028. AI-related products generated over half of export growth in most economies in the region, leaving them exposed to a reversal in technology investment. The bank also highlighted financing risks, with private credit expected to fund USD 800 billion of the USD 2.9 trillion in planned AI capital expenditure for 2025-2028, as tighter financial conditions could curb spending.

US stocks advance as oil prices ease

The S&P 500 rose 0.7% to 7773.95 points on Monday as oil prices fell amid reports of progress in US-Iran talks on reopening the Strait of Hormuz. The Dow Jones gained 0.2% to 51,267.90 points, while the Nasdaq-100 climbed 0.9% to 31,076.44 points after reaching an intraday record. Tesla, Meta and AI chipmaker Nvidia gained between 1.9% and 2.2%, with stronger-than-expected quarterly sales at Nvidia partner Hon Hai reinforcing expectations of sustained spending on AI infrastructure. Software company PTC surged more than 33% after France’s Schneider Electric signed a binding agreement to acquire it.

European stocks edge higher amid fiscal concerns

The Euro Stoxx 50 was little changed at 6241.05 points on Monday, while Switzerland’s SMI gained 0.3% to 13,703.53 points. Concerns over French public finances and political uncertainty in Spain pushed bond yields higher, while elevated oil prices also constrained gains and the euro fell to its lowest level versus the US dollar since May 2025. French electrical equipment group Schneider Electric slumped 10% after agreeing to acquire US software company PTC for EUR 20.1 billion, amid concerns over industrial software valuations and risks associated with AI.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: Swiss unemployment rate (09:00), euro-area retail sales (11:00), US trade balance (14:30), Canadian trade balance (14:30), Canadian Purchasing Managers’ Index (16:00).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.