For the first time since 2007, the yield on the U.S. Treasury 10-year note
The yield curve inversion has preceded every recession barring one in the last 50 years.
Risk appetite was all but eradicated as the inversion came shortly after economic data showed China's industrial output growth cooling to a more than 17-year low, pointing towards a slowdown in Southeast Asia's biggest trading partner.
Adding to market uncertainty, no trade concessions were made by Beijing following the postponement of 10% tariffs on over $150 billion worth of Chinese imports by U.S. President Donald Trump, senior U.S. officials said on Wednesday.
Trump's unpredictability with regards to trade escalation and de-escalation is also "making trading next to impossible to carry a short-term view," Stephen Innes, managing partner at VM Markets Pte Ltd, said in a note to clients.
Trading was difficult "even more so with the markets risk barometers so intricately dialled into the U.S.-China trade development," Innes said.
Singapore shares <.STI> closed at their lowest in over two months, hurt mostly by losses in the financial sector. Oversea-Chinese Banking Corp and United Overseas Bank ended down 3.6% and 2.9%, respectively.
Oversea-Chinese Banking's shares dropped after Bloomberg reported it was weighing a bid for Standard Chartered' Indonesian bank PT Bank Permata. https://tinyurl.com/y5es9fyh
Thai shares closed at their lowest since Jan. 22, dented by losses in telecom and financial sectors.
Telecom company Intouch Holdings Pcl lost 5% after units of Singapore's sovereign fund Temasek launched an overnight block trade for 15.6 billion baht ($505.67 million) worth of its stakes in Intouch.
Bucking the trend, Vietnam stocks closed 1.1% firmer as most sectors ended in the positive territory on the day of expiry of futures contract.
"The movement looks more speculative than based on the fundamentals of the market," Tiung Le, macro-market researcher at BIDV Securities said, adding that it was the expiration date of August future contracts for the Vietnam 30 Index <.VNI30>, which was prompting some hedging through selective buying in the market.
The Vietnam 30 Index is largely composed of blue-chip stocks, and accounted for most of the broader index's gains.
The benchmark index was mainly boosted by financial stocks, with heavyweights Vingroup JSC and Joint Stock Bank For Foreign Trade of Viet Nam ending up about 2% and 3.5%, respectively.
(Reporting by Soumyajit Saha, Editing by Sherry Jacob-Phillips)
By Soumyajit Saha
