Asian shares tumble on jitters over inflation, bond yields

Asian shares fell sharply on Wednesday after a broad slide on Wall Street as investors reacted to a surge in U.S. government bond yields.

Tokyo's Nikkei 225 sank 2.1% to 29,544.29 and the Kospi in Seoul dropped 1.2% to 3,062.18. The Shanghai Composite index shed 1.6% to 3,544.07. In Sydney, the S&P/ASX 200 gave up 1.4% to 7,174.20.

Hong Kong's Hang Seng index reversed earlier losses, gaining 0.6% to 24,639.86 after troubled property developer Evergrande Group said it was selling a stake in Shengjing Bank for 9.9 billion yuan ($1.5 billion) — a step toward addressing its cash crunch.

Evergrande's Hong Kong-traded shares jumped 10.9%.

In Japan, the choice by the ruling Liberal Democrats of Former Foreign Minister Fumio Kishida to head the party and thus become the next prime minister came after markets had closed.

Kishida, 64, is seen as an establishment figure, though he has called for measures to address growing inequality in Japan, the world's third largest economy.

A swift rise in Treasury yields is forcing investors to reassess whether prices have run too high for stocks, particularly the most popular ones. On Tuesday, the yield on the 10-year Treasury jumped to 1.54%, its highest level since late June. That’s up from 1.32% a week ago.

Early Wednesday, it was steady at 1.53%.

“What we got here is stock market that finally looks vulnerable as Treasury yields surge, oil prices look like they could easily hit $90 a barrel, and as supply chain issues show no signs of easing," Edward Moya of Oanda said in a commentary.

On Tuesday, the benchmark S&P 500 index fell 2%, its worst drop since May, and the tech-heavy Nasdaq fell 2.8%, its worst drop since March. Decliners outnumbered advancers on the New York Stock Exchange 4 to 1.

The benchmark S&P 500 is down...