Hedge funds are increasing their bearish bets on the U.S. stock market, as the S&P 500 index has been on the decline since the Silicon Valley Bank crisis occurred earlier this year, according to foreign media including MarketWatch on the 25th (local time).
According to a Goldman Sachs report, clients of hedge funds brokered by the company increased their selling positions on single stocks, exchange-traded funds and stock index products for three consecutive weeks until the 22nd.
In addition, most hedge funds added selling positions and removed buying positions, Reuters said. Among the industries, net sales of discretionary consumer goods (products and services considered non-essential), industry, and finance were the most common.
“Hedge funds have been putting pressure on U.S. stock selling for five of the last six weeks, and this week’s nominal short selling is the largest since Sept. 22,” Goldman Sachs’ prime brokerage team explained.
The U.S. bond yield (market interest rate) surged, leading to a sudden drop in Asian stocks.
Japan’s Nikkei closed 1.11 percent, Korea’s KOSPI 1.31 percent, and Australia’s ASX closed 0.54 percent lower on the Asian stock market on the 26th.
Just before the close, Hong Kong’s Hang Seng Index is down 1.06%, and China’s Shanghai Composite Index is down 0.31%.
Asian stock markets fell on the same day because U.S. bond yields are soaring as the possibility of an additional U.S. rate hike rises.
In the New York Stock Exchange the previous day, the benchmark 10-year bond yield for U.S. government bonds rose 0.10% from the previous trading day to 4.54%. This is the highest since 2007.
However, it did not have a significant impact on the U.S. stock market. This is because low-priced purchases have flowed in. On the previous day, the Dow rose 0.13%, the S&P 500 rose 0.40%, and the Nasdaq rose 0.45%, respectively.
However, it was a direct hit for Asian stock markets.
China is relatively free from the U.S. market, but it fell on the day. This is because the crisis of Evergrande, a famous real estate developer in China, is getting worse.