© Reuters. Men holding umbrellas walk near an electrical panel showing the Nikkei index at a brokerage in Tokyo
By Anshuman Daga
SINGAPORE (Reuters) – Asian stocks rebounded from their two-week lows on Tuesday, with rising commodity prices raising market expectations for a better growth outlook, a day after US Treasury yields and inflation prospects have hit US tech stocks.
Europe’s Eurostoxx 50 and FDXc1 futures gained 0.2%, while London’s FFIc1 futures rose 0.3%. E-mini futures for the 0.5% advanced.
The broader MSCI index for Asia Pacific stocks outside Japan advanced 0.4% to 726.6 after dropping to 719.8, the lowest level in two weeks. The indicator declined from last week’s record, but is still up about 9% this year.
Driven by high commodities, the Australian had an increase of almost 0.9%. The Singapore Straits Times index was up 0.6% and Taiwan rose 0.2%. Hong Kong advanced 1%, while South Korea’s Kospi, which has high technology, lost 0.3%.
Japanese markets were closed due to a holiday.
“We are in unprecedented times, but the likelihood is that low interest rates will persist long after the world economy has rid itself of the pandemic,” said Keith Wade, chief strategist at Schroders (LON 🙂 said in a note.
“For financial markets, such a prospect will intensify the search for yield and will undoubtedly create volatility and bubbles as investors seek returns in the” zero “environment, added Wade.
On Wall Street, high-growth stocks like Apple (NASDAQ :), Microsoft (NASDAQ 🙂 and Tesla (NASDAQ 🙂 weighed in on the, which fell 2.5% on Monday.
Commodity prices strengthened again on Tuesday. Oil prices have risen due to a tight global supply outlook, after US production was hampered by the cold weather and an upcoming meeting of major oil producers is expected to keep production under control.
Analysts said the markets were interpreting the stronger commodity prices that the increase implied strong economic activity.
rose 1.1% to $ 66.4, holding steady close to the one-year highs. it also rose to its highest one-week high, to $ 1,812.6 an ounce, as concerns about inflation have increased the appeal of gold as a hedge.
The strength of commodities kept the Australian dollar stable at $ 0.79 against the US dollar, almost a three-year high.
Bond yields increased sharply this month, as the prospects for more US fiscal stimulus raised hopes for a faster economic recovery worldwide. However, this is also fueling concerns about inflation, prompting investors to sell growth stocks that have rebounded in recent months.
“Real US interest rates are now in positive territory, which has created some concern about the consequences for the stock markets,” said Cesar Perez Ruiz, chief investment officer at Pictet Wealth Management, in a report.
O was flat at 90,026, with the euro rising 0.1% to $ 1.2166. The Japanese yen rose against the dollar, to 105.09 per dollar.
The spot Treasury bills were not traded in Asia, with Tokyo closed for public holidays, but the futures settled slightly and showed an implicit ten-year Treasury yield of 1.34%.
The markets will shift their focus to Federal Reserve Chairman Jerome Powell, who will make his testimony semi-annually on Tuesday. Powell will likely reiterate his commitment to keeping the policy super easy for as long as it takes to raise inflation, analysts said.
“In addition to the ever-present question of what it may take for the Fed to consider a gradual reduction, the most urgent investor interest is at what point the Fed could respond to the level or volatility of interest rates after recent increases,” Citi said in a note.