HONG KONG, May 20 — Asian markets extended their losses today as surging bond yields and stubborn inflation concerns knocked investor confidence already shaken by US President Donald Trump’s renewed threats to strike Iran.

Regional equities tracked losses in Wall Street, where the S&P 500 and the tech-rich Nasdaq posted a third straight day of declines, with the yield on the 30-year US Treasury climbing to levels last seen in 2007.

High energy prices sparked by the Middle East war have fuelled fears of inflation, in turn prompting the bond sell-off.

Trump told reporters at the White House yesterday that he had been just “an hour away” from relaunching Washington’s attacks on Iran before postponing the order, after weeks of a fragile truce and stalled talks to end the war that began late February.

“You know how it is to negotiate with a country where you’re beating them badly. They come to the table, they’re begging to make a deal,” he said.

“I hope we don’t have to do the war, but we may have to give them another big hit. I’m not sure yet.”

Iran’s army spokesman Mohammad Akraminia warned that the Islamic republic would “open new fronts against” the US if it resumed its attacks.

Trump offered a deadline of several days for resuming strikes if a deal was not agreed.

“I’m saying two or three days, maybe Friday, Saturday, Sunday, something, maybe early next week, a limited period of time,” he said.

Since the US and Israel began their war with Iran, the Strait of Hormuz — a key energy corridor which normally sees 20 per cent of global crude transit through — has been effectively closed to shipping.

Brent, the international benchmark, remained above US$110 (about RM436.97) a barrel and West Texas Intermediate topped US$103, raising concerns that inflation could remain elevated for longer and erode corporate margins as well as consumer demand.

Across Asia, most markets were in the red. Tokyo, Seoul, Sydney, Hong Kong, Singapore, Shanghai, Wellington, Jakarta and Kuala Lumpur were down while Bangkok was in the green.

In Europe, London, Paris and Frankfurt traded lower.

The retreat comes just days after a tech-driven rally pushed global equities to fresh highs.

But investors are increasingly questioning whether the artificial intelligence-led surge in valuations has outrun underlying fundamentals.

A workers’ dispute at South Korean chip giant Samsung Electronics threatened to turn into a strike, after talks on bonus payouts collapsed today. But talks resumed with government intervention.

The threat of industrial action at Samsung — potentially involving tens of thousands of employees — has triggered alarm in Seoul, where officials warn prolonged disruption could ripple through exports, chip output and wider economic growth.

Attention is also turning to upcoming earnings from chip giant Nvidia as investors determine whether huge spending on AI data centres is justified by potential returns.

Gold and silver, typically seen as safe-haven assets, held near recent losses as rising yields reduced their appeal. — AFP

Stuart Machin argues government should reduce tax and regulatory burden on supermarkets instead

The boss of Marks & Spencer has called a government proposal for voluntary price caps on essential food items “completely preposterous”, saying it should reduce tax and regulatory burdens instead.

Stuart Machin, the chief executive of the clothing, homewares, food and beauty retailer, said M&S already lost money on some basic items such as milk, bread and baked beans and made very slim profits on other products such as eggs and sugar.

This blog is now closed, you can read more on this story here

Labour is in a curious, transitional state at the moment. Officially Keir Starmer is committed to staying as leader and prime minister until the next election. There is no formal leadership contest underway. But, informally, it has already started, with Andy Burnham and Wes Streeting already setting out their offer to the Labour membership. We will hear more from Streeting this afternoon. But much of the parliamentary party is already working on the basis that a Burnham premiership is all-but-inevitable, and so Streeting’s interventions may turn out to be more about shoring up his position in a potential future Burnham administration than a rehearsal for an election that may never happen.

Here are some of the stories out today covering Starmer, Burnham and Streeting.

Ailbhe Rea in the New Statesman says an insider describes the atmosphere in No 10 now as “very, very odd”. She says:

Starmer and his remaining loyal cabinet ministers want to make every day that they are still in office count, and are determined to cut through the noise of the leadership drama. Many cabinet ministers, who may not survive long in their posts if Starmer is replaced as Prime Minister, are desperate to set a legacy and bank achievements in their briefs while they can. “Let’s get out there and make the case for what we’re doing,” has been Starmer’s message to colleagues. There is even a fleeting hope inside Downing Street that the leadership speculation “burns itself out”, that “Wes and Andy tearing chunks out of each other for weeks might just make Keir look better”. But even many loyalists accept that is wishful thinking. “The writing is on the wall, even if we don’t know exactly what form that takes yet,” one concludes.

Patrick Maguire, Geraldine Scott and Larisa Brown in the Times say Starmer could stay in Downing Street until early next year. They report:

Ministers familiar with Starmer’s thinking say he has no plans to step down before the Labour Party conference in September and is unlikely to relinquish office before Christmas.

They told The State of It, the political podcast from The Times and Sunday Times, that there were still significant obstacles ahead for Andy Burnham, the mayor of Greater Manchester, who on Tuesday refused to rule out breaking Labour’s manifesto pledge against tax rises.

Caroline Wheeler in the i says cabinet ministers are already angling for jobs in a Burnham administration. She says:

Senior ministers are preparing visits to Makerfield amid growing expectations in Westminster that Burnham could ultimately take the Labour leadership – and with it the power to appoint the next Cabinet.

“The equation cabinet ministers are making is that if they go and he wins they will get a plum job,” one senior source said. “If they don’t go and he wins, he will remember. And if they don’t go and he loses, he will remember.”

Many now believe that Burnham is lining up to make Ed Miliband, the Energy Secretary, as his chancellor. It comes as Miliband’s special adviser was seconded to work with Burnham for the by-election campaign …

Burnham is also widely expected to make Lucy Powell, the Deputy Leader of the Labour Party, his deputy prime minister. Multiple sources said that other women likely to be given top jobs include Angela Rayner, the former deputy prime minister, Lisa Nandy, the Culture Secretary, and Louise Haigh, the former transport secretary, who is also the co-chair of the influential soft-left Tribune group of MPs.

Sam Blewett at Politico has taken an in-depth look at the team supporting Burnham. He says the key figure is Kevin Lee, director of the Greater Manchester mayor’s office, who has been advising Burnham with little break since 2010.

Retail sources rebuff government proposal as ‘unjustified’ and likely to push costs up across board

UK supermarkets have been asked by the government to consider freezing the prices of some essential foodstuffs to protect the public from inflation fuelled by the Middle East conflict.

Retailers rejected the plan, criticising its potential cost amid rising taxes, fuel and energy costs and arguing it could push up prices for shoppers overall.