Asian stock markets advance after Wall Street declines on bond market volatility

Asian stock markets were mostly higher Wednesday, overcoming initial caution after a bond sell-off nudged Wall Street lower.

KEEPING SCORE: Tokyo's Nikkei 225 index rose 0.7 percent to 19,765.19 points and Seoul's Kospi gained 0.8 percent 2,114.34. The Shanghai Composite Index gave up 0.1 percent 4,395.27 and Hong Kong's Hang Seng also shed 0.1 percent to 27,371.33. Sydney's S&P ASX 200 advanced 0.6 percent to 5,708.60 and India's Sensex rose 0.1 percent to 26,911.12. Taiwan, Singapore, Jakarta and New Zealand also rose. On Tuesday, the Dow Jones industrial average lost 0.2 percent after dropping nearly six times that far during the day. The Standard & Poor's 500 lost 0.3 percent and the Nasdaq composite slid 0.4 percent.

BOND WOBBLES: A spike in long-term interest rates Tuesday rattled investors who sold U.S. stocks. Traders have been selling government bonds in recent weeks. That accelerated Tuesday, bringing down prices and, in turn, driving up the benchmark U.S. bond yield to the highest level since late November. In the United States, the yield on the 10-year Treasury note surged as high as 2.36 percent. The selling eased by late afternoon and the yield fell to 2.25 percent, down from 2.28 percent late Monday. The yield was below 2 percent as recently as April 28. Weakness in bond prices pushes up the cost of borrowing, including mortgages and other loans, which can drag on the economy.

ANALYST'S COMMENT: "Like a car smash in slow motion, global bond markets are making the adjustment to a post-QE world," said Michael McCarthy of CMC Markets in a report referring to the winding down of ultra-easy monetary policy in the U.S. "Bond yields are at three-month highs, and seem set to rise further despite remarks from Fed officials that the pace of tightening may be slow," he said. "The exception is Greece, where ten-year bonds yields sit in the middle of the three-month range at 10.6 percent. This risk premium to other bonds reflects market concerns amid reports the IMF is now lining up with Greece to demand investors take a haircut on existing debt."

GREECE: Greece made a 757 million euro ($844 million) debt payment to the International Monetary Fund but owes more in coming weeks. Athens is under pressure from its creditors to liberalize labor markets further and reduce state funding for pensions. The radical left Syriza-led government, elected in January, is seeking the release of stalled rescue loan money as state coffers run low. Greece has taken as "many steps as possible" toward reaching an agreement with bailout lenders, Prime Minister Alexis Tsipras said Tuesday. "It is now the turn of our (European) partners to take the steps needed."

VERIZON AND AOL: Verizon, the biggest U.S. mobile phone carrier, agreed to buy Internet pioneer AOL for about $4.4 billion, a 15 percent premium to its closing price Monday. The acquisition is the latest effort by a wireless company to tap into some of the money shifting to streaming video and mobile devices. Shares in AOL jumped 18.6 percent. The stock added $7.93 to $50.52. Verizon slipped 18 cents, or 0.4 percent, to $49.62.

ENERGY: Benchmark U.S. crude added 57 cents to $61.32 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 50 cents on Tuesday to close at $60.75. Brent crude, used to price international oils, advanced 52 cents to $67.90. It soared $1.66 on Monday to $67.38.

CURRENCY: The euro gained to $1.1242 from the previous session's $1.1218. The dollar fell to 119.85 yen from 119.88 yen.