Impact on the share market of higher global bond yields

Is it the end of the bull market in bonds? The US ten year bond yield has been over 3% three times in the last month and is now at 3.11%.

According to Macquarie’s analysts’ rates are likely to go higher on the back of a pick up in global inflation, and the unwinding of the enormous monetary stimulus of the past decade.

Although, the official rate in Australia is unlikely to move up yet, what happens offshore is reflected here with Australia’s ten year bond yield at 2.92%

Sectors that are often impacted by higher bond yields are REITs and infrastructure.

In the REITs sector companies seeing softer prices include Stockland Corporation Ltd (ASX: SGP), Scentre Group (ASX: SCG) and Westfield Corp Ltd (ASX: WFD).

The following infrastructure companies are also down:  Spark Infrastructure Group (ASX: SKI), Transurban Group (ASX: TCL) (Transurban is also being sold on the back of the ACCC scrutiny of the Westconnex acquisition), and Sydney Airport Holdings Pty Ltd (ASK: SYD).

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Motley Fool contributor Rosemary Steinfort holds shares in Transurban. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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