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Asia: Markets sink with Wall Street as tech firms take another hit

[HONG KONG] Asian markets went into reverse Wednesday, tracking fresh losses on Wall Street as investors fret about rising US Treasury yields and speculation that interest rates will rise four times this year.

Technology firms were once again in the firing line in response to a plunge in Google parent Alphabet on costs worries while Apple suffered a fifth straight loss because of worries over the crucial smartphone sector.

The yield on benchmark 10-year Treasuries broke three per cent on Tuesday for the first time in more than four years as surging oil prices and the impact of Donald Trump's huge tax cuts fan inflation expectations.

There is a fear the higher yields will divert investor attention from equities as safe-bet government debt looks more attractive.

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That, along with an improving economy, has fanned talk the Federal Reserve will have to lift borrowing costs more than the three times that has been widely expected this year.

The dollar held most of its recent gains against its peers on expectations of higher rates.

All three main indexes in New York ended deep in the red, with the Dow clocking up a fifth successive loss, with sentiment also dented when construction and mining equipment giant Caterpillar gave a subdued earnings outlook.

"The sudden surge in US yields had already been weighing on equity sentiment, but when you factor in the skid in technology stocks and Caterpillar's less than reassuring outlook, it makes for a very rough day on the trading floor," said Stephen Innes, head of Asia-Pacific trading at Oanda.

IRAN TALK HITS OIL

Tokyo ended the morning session 0.7 per cent lower as a weaker yen was unable to provide support, while pharmaceutical giant Takeda plunged more than six per cent after it ramped up its offer for Irish rival Shire.

Hong Kong shed more than one percent and Shanghai slipped 0.4 per cent.

Singapore dropped 0.7 per cent, Seoul was one percent off and Taipei lost 0.8 per cent.

Sydney and Wellington were closed for ANZAC day.

Technology firms were among the worst performers again after a big sell-off in their US counterparts including Apple, Amazon, Alphabet, Facebook and Microsoft.

Hong Kong-listed AAC Technologies tumbled 3.5 percent, Apple supplier TSMC shed 1.1 per cent in Taipei and South Korean titan Samsung tumbled 1.8 per cent.

On oil markets both main contracts extended Tuesday's losses after Mr Trump and Emmanuel Macron - during a state visit by the French president - called for a "new" nuclear deal with Iran.

The comments come as the US president prepares to say whether he will stick with a three-year old agreement designed to curb Iran's nuclear programme.

Talk that he will reimpose sanctions on Tehran have helped push prices up in recent weeks.

AFP