SYDNEY, Feb 19 — Asian stocks pulled back from all-time peaks today as higher longer-dated bond yields and underwhelming US data dented investor confidence in a faster economic recovery from the Covid-19 pandemic, while gold hit a seven-month trough.

MSCI’s broadest index of Asia Pacific shares outside of Japan was last down 0.1 per cent at 733.67 from a record high of 745.89 touched yesterday.

The index is on track for a small weekly loss after two consecutive weeks of gains.

Since the start of the year, the index has surged nearly 10.5 per cent largely led by easy monetary and fiscal policies around the world.

Today, Australia’s benchmark S&P/ASX 200 index was down 0.8 per cent while Japan’s Nikkei fell 0.4 per cent.

Chinese shares started in the red with the blue-chip CSI300 off 0.6 per cent.

"The recent move up in longer dated core yields appears to be weighing on equity investors’ mind,” said Rodrigo Catril, forex strategist at National Australia Bank.

Core bond yields have pushed higher globally led by the so-called "reflation trade” where investors wager on a pick-up in growth and inflation. Successful coronavirus vaccine roll-outs so far and hopes of massive fiscal spending under US President Joe Biden have spurred reflation trades.

Germany’s 10-year yield yesterday posted its highest close since June, British 10-year yields traded at a 10-month top of 0.65 per cent and US Treasury yields are hovering near one-year highs around 1.3 per cent, a large factor supporting the US dollar.

Rising bond yields hurt the appeal of gold, with spot prices hitting a seven-month low of US$1,766 an ounce today.

While rising yields weighed on investor sentiment, "disappointing US jobless figures didn’t help the cause either,” Catril added.

An unexpected increase in the number of Americans seeking jobless benefits hung heavy on outlook. The Labor Department reported initial unemployment claims rose by 13,000 to 861,000, injecting skepticism about how quickly the US economy could rebound from the global pandemic.

Further, US housing starts fell 6.0 per cent in January, the first decline in five months.

On Wall Street, the Dow fell 0.38 per cent, the S&P 500 lost 0.44 per cent, and the Nasdaq Composite 0.72 per cent.

In currencies, the dollar was steady with its index at 90.568.

The British pound hit its highest in over three years at US$1.3965 led by the country’s successful vaccine roll-out where 16.5 million people have already been inoculated. It is on track for a sixth straight weekly rise.

The euro is poised for a small weekly loss. The single currency was last at US$1.2085.

The risk sensitive Australian dollar was on track for a third straight weekly rise, last trading at US$0.7762.

In commodities, oil markets saw some profit-taking following days of gains that were driven by a deep freeze across Texas that weighed on production.

Brent crude fell US$1.17 to settle at US$62.76 a barrel. US West Texas Intermediate (WTI) crude futures slipped US$1.37 to US$59.15 a barrel.

Copper surged nearly 3 per cent to its highest since April 2012 yesterday led by demand from Chinese investors who returned from a week-long holiday. — Reuters