Asian shares retreat as tech weakness, oil surge and rising yields take focus

Asian equities retreated widely on Thursday, with technology stocks bearing the brunt, as market participants stayed uneasy over crude prices trading above $100 a barrel and climbing bond yields ahead of crucial U.S. inflation readings.

The decline came after a soft Wall Street overnight, where the technology-heavy Nasdaq Composite shed 0.6%.

U.S. equity futures were mixed during Asian hours on Thursday, with Nasdaq 100 futures posting a modest decline.

Technology stocks drive declines as oil climbs and yields stay high

Japan's Nikkei 225 lost 0.8%, while the wider TOPIX index was down 0.4%.

Japanese stocks' advances were limited by a sharply firmer yen, as investors boosted wagers on a Bank of Japan rate increase this month.

South Korea's KOSPI slid 1.1%, with heavyweight Samsung Electronics (KS:005930) and SK Hynix (KS:000660) down 1.4% and 0.6%, respectively.

Hong Kong's Hang Seng index fell 1.6%, while its Hang Seng TECH sub-index dropped more than 2%.

Brent crude futures ticked up to about $101.4 a barrel on Thursday, having earlier broken above the psychologically significant $100 mark for the first time since July.

The move followed a significant escalation in shipping attacks involving Iran and the United States, stoking concerns about more disruptions to energy supplies from the Middle East.

The 10-year U.S. Treasury yield held around 4.84% after touching its highest level since 2023 in the prior session.

A $6 billion Treasury buyback of longer-dated debt disappointed some investors who had anticipated a bigger operation, helping to keep yields elevated.

The rise in yields has added pressure on technology and other growth stocks, whose valuations are especially sensitive to higher borrowing costs.

U.S. inflation figures awaited; Fed rate-hike wagers persist

In mainland China, the Shanghai Composite edged down 0.2%, while the blue-chip Shanghai Shenzhen CSI 300 slipped 0.3%.

Australia's S&P/ASX 200 dropped 1.6%, and Singapore's Straits Times Index fell 0.6%.

Futures linked to India's Nifty 50 edged 0.3% higher.

The oil rally has clouded the outlook for central banks by threatening to keep inflation elevated even as economic growth comes under pressure from higher energy costs.

Fed funds futures pointed to roughly a 60% probability of a rate hike at the Federal Reserve's Sept. 15-16 meeting, according to CME FedWatch.

Investors are paying particularly close attention to U.S. producer prices due on Thursday and consumer prices scheduled for Friday.