Stocks struggle as spiking US bond yields, China fears temper optimism

Global stocks mostly fell Thursday as US treasury bond yields rose further from multi-year highs amid festering worries about China's economic woes.

Bets on another US interest rate hike have pushed the dollar up against the yen, and traders are keeping an eye on Japanese authorities to see if they intervene to support their currency AFP News

Global stocks mostly fell Thursday as US treasury bond yields rose further from multi-year highs amid festering worries about China's economic woes.

The yield on the 10-year US Treasury note, which hit a 15-year peak on Wednesday, climbed above 4.3 percent.

The rise in yields comes amid worries the Federal Reserve could continue to hike interest rates or could leave interest rates at lofty levels for longer to counter sticky inflation.

Major US indices fell around one percent, the third straight session of losses.

"The current slow-motion, long-term rate shock has a way to go, in our view, and equity markets will struggle as it evolves," said a note from DataTrek. "All this fits with our belief that we're in for a sloppy few weeks ahead."

Earlier, London, Paris and Frankfurt indices all ended the day firmly in the red.

"A more downbeat mood is settling in about what lies ahead for the global economy, as China's problems spread into the financial sector, while high inflation still lingers elsewhere," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"The FTSE 100 is trading lower, with the Lionesses' winning spirit proving highly elusive to capture, given the concerns unsettling investors right now," she said, referring to the English football team's advance to the Women's World Cup final.

The dour mood had earlier filtered through Asia, where most major markets were deep in the red.

However, Hong Kong was flat and Shanghai saw small gains thanks to bargain-buying after a run of losses.

Fresh figures on Wednesday pointed to a second month of falling new home prices in China, underscoring deep problems in the property sector that observers fear could spill over into the domestic and global economy.

That came a day after news that growth in retail sales and industrial production had slowed.

Chinese leaders this week pledged to boost consumption at home and lift the private sector, though there were no details.

Similarly, promises of help for the property sector and other key areas of the economy have not been followed up with anything concrete.

"Investors looking for more aggressive support from policymakers amid soft activity have been disappointed as the recent incremental measures haven't been sufficient to restore confidence," said Taylor Nugent at National Australia Bank.

New York - Dow: DOWN 0.8 percent at 34,474.83 (close)

New York - S&P 500: DOWN 0.7 percent at 4,370.36 (close)

New York - Nasdaq: DOWN 1.2 percent at 13,316.93 (close)

London - FTSE 100: DOWN 0.6 percent at 7,310.21 (close)

Frankfurt - DAX: DOWN 0.7 percent at 15,676.90 (close)

Paris - CAC 40: DOWN 0.9 percent at 7,191.74 (close)

EURO STOXX 50: DOWN 1.3 percent at 4,227.83 (close)

Tokyo - Nikkei 225: DOWN 0.4 percent at 31,626.00 (close)

Hong Kong - Hang Seng Index: FLAT at 18,326.63 (close)

Shanghai - Composite: UP 0.4 percent at 3,163.74 (close)

Euro/dollar: DOWN at $1.0878 from $1.0879 on Wednesday

Pound/dollar: UP at $1.2745 from $1.2732