- Bond yields are stable after the last plunge
- Chinese Tencent tumbles up to 10% on gambling worries
- Dollar Holds Near One-Month Low, Aussie Jumps To Cut Plan
- Higher oil scratches after 3% drop
LONDON, Aug. 3 (Reuters) – The rally in the government bond market that had pushed US Treasury yields below 1.2% and the entire negative German curve collapsed on Tuesday, although it There were more problems in China as internet giant Tencent (0700.HK) took another hit.
The rise in bank stocks helped major European markets get off to a good start, but the real action was elsewhere.
Chinese state-run media calling online games “spiritual opium” was enough to bring Tencent (0700.HK) down to 10% in Asia, just after its worst month in nearly a decade.
Panic also engulfed gaming rivals NetEase (9999.HK), XD (2400.HK) and GMGE and meant that a closely watched Chinese technology index (.CSIINT) fell 2.3% in its worst. day since mid-June. Read more
“China has control over its tech sector and this has already resulted in a huge devaluation,” said Hasnain Malik, head of equity research at Tellimer.
He said there would be no reversal in Beijing, although the more than 40% drop in many of China’s biggest tech companies since February meant valuations against record-breaking US tech giants meant that they would henceforth be worth the trouble of being “revisited”.
The other big moves were the Australian dollar which jumped half a percent after its central bank held firm by cutting its bond buying program from next month despite ongoing lockdowns against coronaviruses.
The US dollar hid at a one-month low after disappointing economic data on Monday. It also pushed the benchmark 10-year Treasury yield as low as 1.151%, its lowest since July 20.
The German 10-year rate, the benchmark for the euro zone, fell to its lowest since early February at -0.486%. It was last up less than a basis point to -0.47%.
Its 30-year yield, which turned negative and sent the entire German yield curve into negative territory on Monday, was hovering around 0%.
“There is currently a definite bearish bias in the dollar,” said Vasileios Gkionakis, global head of currency strategy at fund manager Lombard Odier in Switzerland. “You are starting to see a rotation of growth away from the United States”
In commodities markets, oil has stabilized after falling 3% on Monday due to a combination of US and Chinese economic concerns and whether the sharp rise in COVID-19 Delta variant cases around the world would be serious enough to harm global growth.
Brent crude rose 33 cents in London to $ 73.28 a barrel. US crude climbed to $ 71.56 per barrel while gold and industrial copper were both slightly lower at $ 1,810.45 per ounce and $ 9,594.50 per tonne respectively.
Additional reports by Tom Arnold; Editing by Emelia Sithole-Matarise
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