HONG KONG, February 9 ― Asian equities rose today, with technology stocks in particular advancing after a strong session on Wall Street, while US Treasury yields held near multi-year highs ahead of data. inflation closely watched this week.
Investors of all asset classes are giving considerable thought to the pace and timing of interest rate hikes by central banks around the world.
Barring any big surprises, the consumer price index should cement expectations that the US Federal Reserve will raise interest rates next month, with a strong impression providing additional support for those forecasting a bigger hike. of 50 basis points.
MSCI’s broadest index of Asia-Pacific stocks outside Japan added 1% to its highest level in two weeks, helped by a 3% gain in Hong Kong-listed tech stocks.
The Japanese Nikkei gained 0.9%.
All three major Wall Street indexes closed higher with tech stocks including Apple Inc and Microsoft Corp surging, as did banking stocks buoyed by the prospect of higher U.S. interest rates.
Nonetheless, the Nasdaq Composite is still down 9.2% this year after a brutal January.
Manishi Raychaudhuri, Asia-Pacific equity strategist at BNP Paribas, said market volatility persisted as investors tried to determine how often, how far and how quickly central banks would raise interest rates.
“The dominant market theme is central bank monetary policy,” he said. “I think the volatilities will continue and maybe increase…but longer term, corporate balance sheets, especially in Asian emerging markets, look much better than they did before,” he said. declared.
Elsewhere in Asia Pacific, gains by tech names helped Korea’s KOSPI rise 0.8% and Commonwealth Bank of Australia, the country’s largest bank, gained 5% after announcing a share buyback of 2 billion Australian dollars.
Gains in Hong Kong financial and tech stocks meant the local benchmark rose 2%, unbothered by tighter restrictions to tackle a new wave of Covid-19.
E-mini futures for the S&P 500 rose 0.23%.
However, the focus on the US inflation numbers due yesterday is likely to limit further gains.
“Even though we’re sitting in Asia, markets are still eagerly awaiting Thursday’s CPI printout in the US, so they’re sitting on their hands right now,” said Marcella Chow, global markets strategist. based in Hong Kong at JPMorgan Asset Management.
“The market currently expects January CPI to be 7.3% vs. 7% in December, and if it is higher than expected, we could see 10-year yields rise and even reach 2 %, and push a value spin,” he added. she added.
Higher yields typically drive investors away from so-called growth stocks, especially tech names, towards value stocks.
US Treasury yields remained firm in Asian trades, after hitting multi-year highs the day before, as did Eurozone yields.
The 10-year Treasury yield was 1.9559%, after hitting 1.97% yesterday, its highest since November 2019, and the two-year yield was 1.3435%, just below its highest since March 2020.
In Asia, the yield on Japanese 10-year government bonds rose 1 basis point to 0.215%, its highest level since January 2016.
Currency markets were fairly quiet, although the dollar hit a one-month high against the yen as gains in US yields outpaced those in Japan.
The dollar index, which measures the greenback against six peers, was flat at 95.536.
Oil regained ground after falling earlier in the week on optimism over talks with Iran, leading to a possible increase in supply.
Brent crude futures rose 0.3% to US$91.01 (RM380.91) a barrel, while US crude was at US$89.47 a barrel, up 0, 1%.
Spot gold was flat at US$1,826 an ounce. ― Reuters