Asian stocks reached two-week lows today (May 6th) after weak US and EU sessions, as investors worried about a sell-off in global sovereign bonds.
According to Reuters, the sell-off is likely to have been sparked by the persistent rise in German bond yields, driven by worries over a Greece debt default and excessively long positions in European debt.
Greek ministers have launched an effort to persuade European officials to release €7.2 billion (£5.3 billion) of bailout money, but the latter are not satisfied with Greek plans for economic reform.
The Greek government is desperate to reach a deal before a scheduled €1 billion debt interest repayment to the IMF on May 12th.
"The current sell-off in bonds appears to have been led by developments in the eurozone markets," Ashish Agrawal, an emerging markets strategist at Credit Suisse in Singapore, told Reuters.
South Korea's Kospi fell 1.3 per cent to 2,105.17 and Australia's S&P/ASX 200 dropped 1.6 per cent to 5,730.80. The Hong Kong's Hang Seng edged down 0.4 per cent to 27640.91 and China's Shanghai Composite Index lost 1.5 per cent to 4231.33. Japan was closed for a holiday.
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