In This Article:
* MSCI Asia-Pacific index down 1.35 pct, Nikkei drops 0.8 pct
* Asia hit as Wall St tumbles on trade woes, growth concerns
* Dollar struggles amid declining U.S. Treasury yields
* Oil falls as trade woes stoke demand concerns
By Shinichi Saoshiro
TOKYO, Dec 5 (Reuters) - Asian stocks slid on Wednesday, dragged down by Wall Street's tumble as sharp declines in long-term U.S. Treasury yields and resurgent trade concerns stoked investor worries about global economic growth.
Global equities have been shaken as a flattening U.S. Treasury yield curve fans worries about a recession, and on growing doubts that Washington and Beijing will be able to clinch a substantive trade deal during a temporary cease-fire agreed at the weekend.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.35 percent.
Hong Kong's Hang Seng retreated 1.55 percent and the Shanghai Composite Index dipped 0.2 percent.
Japan's Nikkei dropped 0.8 percent and South Korea's KOSPI shed 0.5 percent.
Australian stocks lost 1 percent, pressured by global losses. The mood further soured after data showed Australia's third-quarter growth fell short of expectations. The Australian dollar was down 0.5 percent at $0.7304.
The Dow retreated 3.1 percent and the Nasdaq sank 3.8 percent on Tuesday. U.S. financial shares, which are particularly sensitive to bond market swings, dropped 4.4 percent.
Following Wall Street's overnight tumble, S&P e-mini futures nudged up 0.4 percent in Asian trade on Wednesday.
Signals from the Federal Reserve last week that it may be nearing an end to its three-year rate hike cycle has pushed the 10-year U.S. Treasury yield to three-month lows below 3 percent.
Concerns about slowing U.S. growth have accelerated the flattening of the yield curve, a phenomenon in which longer-dated debt yields fall faster than their shorter-dated counterparts.
The spread between the two-year and 10-year Treasury yields was at its flattest level in more than a decade and edging closer to an inversion, when long rates fall below short rates.
"The market decline in the U.S. overnight and the flattening of the yield curve reflect that economic growth momentum is taking over as the primary concern for investors, even as the latest ISM manufacturing data is holding up well," wrote Tai Hui, market strategist at J.P. Morgan Asset Management.
A flatter curve is seen as an indicator of a slowing economy, with lower longer-dated yields suggesting that the markets see economic weakness ahead.
According to the Cleveland Federal Reserve, an inverted yield curve has preceded the last seven U.S. recessions.