Asia-Pacific markets fall, tracking declines on Wall Street

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Buildings in Auckland, New Zealand, on Monday, May 22, 2023.

Bloomberg | Bloomberg | Getty Images

Asia-Pacific markets fell on Thursday, tracking declines on Wall Street.

Japan's benchmark Nikkei 225 fell 1.06% at the open, while the Topix lost 0.85%. South Korea's Kospi slipped 0.59% and the small-cap Kosdaq declined 0.69%.

Australia's benchmark S&P/ASX 200 fell 0.36%.

Futures for Hong Kong's Hang Seng index stood at 23,640, lower than its last close of 23,827.78.

Investors will be looking out for the unveiling of New Zealand's 2025 budget.

Stock futures were flat in overnight trading Wednesday following a sizable sell-off on Wall Street as worries about a ballooning deficit deepened.

Futures on the Dow Jones Industrial Average dipped 60 points. S&P 500 futures and Nasdaq 100 futures were both little changed.

Overnight stateside, the three major averages closed lower. Stocks sold off, pressured by a sharp spike higher in Treasury yields as traders grew worried that a new U.S. budget bill would put even more stress on the country's already large deficit.

The Dow Jones Industrial Average lost 816.80 points, or 1.91% to 41,860.44. The S&P 500 shed 1.61% to 5,844.61. The Nasdaq Composite slid 1.41% to 18,872.64.

The 30-year Treasury bond yield last traded around 5.09%, touching the highest level going back to October 2023. The benchmark 10-year Treasury note yield traded at 4.59%.

— CNBC's Lisa Kailai Han and Alex Harring contributed to this report.

Emerging markets said to see the next bull run as the ‘sell U.S.' narrative gains ground

Emerging markets stocks are in the spotlight again as the "sell U.S." narrative gains fresh momentum, following Moody's recent downgrade of the U.S. credit rating.

The Bank of America heralded emerging markets as "the next bull market" recently.

"Weaker U.S. dollar, U.S. bond yield top, China economic recovery…nothing will work better than emerging market stocks," Bank of America's team, led by investment strategist Michael Hartnett, said in a note.

Similarly, JPMorgan upgraded emerging market equities from neutral to overweight on Monday, citing thawing U.S.-China trade tensions and attractive valuations.

Read the full story here.

—Lee Ying Shan

Stocks close lower Wednesday

Stocks closed lower Wednesday afternoon.

The Dow Jones Industrial Average lost 816.80 points, or 1.91% to 41,860.44. The S&P 500 shed 1.61% to 5,844.61. The Nasdaq Composite slid 1.41% to 18,872.64.

— Sarah Min