Kamal Ghorui
Stocks market in Asia traded mostly red on Wednesday ahead of US President Donald Trump’s speech in Davos, dragged down by a sharp overnight sell-off in the US, rising geopolitical tensions between Washington and Europe over Greenland. In Hong Kong, HSI dipped 39 points or 0.15% to 26,447 at 10:40 AM IST. Nikkei also traded in red, down 280 points or 0.53% to 52,710. South Korea’s Kospi was down 2 points or 0.04%.Meanwhile, Shanghai and Shenzhen added 0.16% and 0.76% to reach 4,120 and 14,263, respectively. Bond markets remained firmly in focus, particularly in Japan, where finance minister Satsuki Katayama sought to soothe nerves after a heavy sell-off pushed yields to record highs. In Asian trading, US Treasuries stabilised after long-term yields had jumped during the previous US session. The 30-year Treasury yield rose eight basis points to a four-month high, driven by a rout in Japanese bonds and reports that a Danish pension fund was preparing to exit US government debt. The dollar edged slightly lower, according to a Bloomberg index. Market movements reflected growing unease among global investors over the direction of US foreign policy, with funds scaling back exposure to American assets. Volatility has been fuelled by President Donald Trump’s threat to impose tariffs on European countries that opposed his proposal for the US to purchase Greenland, prompting investors to reassess the US as a reliable safe haven, Reuters reported. The sell-off that swept global markets on Tuesday originated in Japan, where yields on 30-year government bonds surged by more than a quarter of a percentage point. The jump followed concerns surrounding Prime Minister Sanae Takaichi’s plans to reduce taxes while increasing public spending. The rise in yields threatened to unwind carry trades that rely on Japan’s low borrowing costs, contributing to higher yields in other markets. In response, Japan’s finance minister urged market participants to remain calm, highlighting the country’s lowest dependence on debt issuance in 30 years, rising tax revenues and the smallest fiscal deficit among Group-of-Seven economies as signs that fiscal policy remains responsible and sustainable. Elsewhere, Danish pension fund AkademikerPension said it would divest from US Treasuries by the end of the month, citing concerns over credit risks linked to the Trump administration. “The US is basically not a good credit and long-term the US government finances are not sustainable,” Anders Schelde, chief investment officer at AkademikerPension, told Bloomberg on Tuesday. US treasury secretary Scott Bessent also called for restraint, comparing the reaction to the Greenland issue to what he described as the “hysteria” that followed Trump’s announcement of sweeping tariffs in April. Trump is expected to arrive in Davos on Wednesday for the World Economic Forum. Adding to the cautious mood, South Korea is set to delay plans to invest up to $20 billion in the US this year due to pressure on its currency, according to a person familiar with the matter.
