By Ese Erheriene 

Stock selling eased in Asia Pacific Wednesday from the overnight pace in the U.S. and Europe, where fears of monetary tightening by the European Central Bank sent markets lower.

Citing signs of a strengthening recovery in the Eurozone, ECB chief Mario Draghi hinted Tuesday that the bank may cautiously wind down its stimulus.

"As the eurozone recovery continues to gather momentum, markets are gradually turning their view to the growing likelihood of a change in policy stance" by the ECB, said Rob Carnell, an economist at ING.

Mr. Draghi's remarks sent equities and the dollar lower on Tuesday, with the euro making its largest jump against the dollar in a year.

Sovereign-debt yields also climbed, good news for the likes of Japanese insurers, heavy buyers of such securities. Higher yields help pay future claims. Dai-ichi Life and T&D Holdings each rose about 1.5%.

The Nikkei Stock Average fell 0.3%--less than the overnight declines in other major global indexes--and was about matched by benchmarks in Korea and Hong Kong.

Taiwan's Taiex was off 1.1% as that tech-heavy market shook in the wake of fresh selling in U.S. technology companies. Following declines of nearly 2% by the likes of Alphabet, Microsoft and Amazon, Taiwan's Catcher Technology, Wistron and Pegatron all fell slightly more than 2%.

In Korea, the Kospi's IT subindex slid 1.8%.

OCBC expects selling pressure in tech to continue dominating the agenda. More broadly, the investment bank said global equities were hit "as Fed officials [appeared] coordinated in hinting that asset valuations are looking elevated." Stocks have had a strong first have, with nearly every major equities index globally higher.

Australia was again a regional outlier, this time to the good. After notably underperforming of late, the S&P/ASX 200 was up 0.5%, helped by 2% gains in oil and metals companies as prices of those commodities rebounded Tuesday.

Oil jumped 2% overnight to log its best gains in a month, and though half that jump was erased following the release of downbeat U.S. inventory estimates from an industry group, oil recovered some in Asian trading.

Benchmark U.S. oil futures fell back below $43.70 a barrel on the disclosure from the American Petroleum Institute but were recently at $44.07, down 0.4% from Tuesday's settlement.

And as Asian sovereign-debt markets followed the overnight selling caused by Mr. Draghi's comments, action was more muted in Japan, where the central bank has an explicit yield target of zero on 10-year bonds as part of its stimulative policy.

In Australia, the 10-year yield rose to 2.448% from 2.371% late Tuesday, while Korea's 10-year climbed to 2.169% from 2.119%.

Write to Ese Erheriene at ese.erheriene@wsj.com

 

(END) Dow Jones Newswires

June 28, 2017 01:40 ET (05:40 GMT)

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