Asian stocks track Wall St tech rally, U.S. yields cling to highs

Hong Kong, Feb 9 (BUS): Asian stocks rose on Wednesday with tech stocks particularly high after a solid session on Wall Street, while US Treasury yields held near multi-year highs ahead of closely watched inflation data this week. the week.

Investors across asset classes devote a great deal of thought to the pace and timing of interest rate hikes by central banks around the world.

Barring any big surprises, the CPI should bolster expectations that the Federal Reserve will raise interest rates next month, with strong prints providing further support for those flipping higher 50 basis points.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 1% to a two-week high, buoyed by 3% gains in Hong Kong-listed technology shares.

Japan’s Nikkei rose 0.9%.

All three major Wall Street indexes closed higher with shares of technology companies including Apple Inc and Microsoft Corp rising, as did banking stocks, boosted by the prospect of higher US interest rates.

However, the Nasdaq Composite is still down 9.2% this year after a grueling January.

Market volatility lingered as investors tried to see how often, how often and how quickly central banks raised interest rates, said Manishi Raichodhury, Asia Pacific equity analyst at BNP Paribas.

“The main topic of the market is the monetary policies of the central banks,” he said. “I think volatility will continue and possibly increase…but over the long term corporate balance sheets, particularly in Asian emerging markets it looks much better than it used to be,” he said.

Elsewhere in the Asia-Pacific region, gains in Korean technology names KOSPI helped it rise 0.8% and Commonwealth Bank of Australia, the country’s largest bank, rose 5% after announcing a A$2 billion share buyback, Reuters reported.

Gains in Hong Kong’s financial and tech stocks meant the local benchmark rose 2%, unaffected by stricter restrictions to combat a new wave of COVID-19.

E-mini futures for the S&P 500 Index rose 0.23%.

However, focus on US inflation numbers due on Thursday is likely to limit further gains.

“Although we are sitting in Asia, markets are still eagerly awaiting Thursday’s CPI print from the US, so they are sitting in their hands now,” said Marcella Chow, global market strategist at JPMorgan Asset Management.

“The market is currently expecting the CPI for January to be 7.3% versus 7% in December, and if it comes in higher than expected, we could see 10-year returns go up and up to 2%, driving value rotation,” she added.

Higher returns typically lead investors to exit from so-called growth stocks, particularly technology names, to value stocks.

US Treasury yields held steady in Asian trading, after touching multi-year highs the day before, as did Eurozone yields.

The yield on the 10-year Treasury was 1.9559%, after hitting 1.97% on Tuesday, the highest level since November 2019, and the yield on the 2-year Treasury was 1.3435%, just below the highest level since March 2020.

In Asia, the yield on Japanese 10-year government bonds rose one basis point to 0.215%, the highest level since January 2016.

Currency markets were very quiet, although the dollar touched a one-month high against the yen, like gains in the US

Yields exceed those of Japan.

The dollar index, which measures the greenback against six peers, settled at 95,536.

Oil regained some of its gains after falling earlier in the week on optimism about talks with Iran, which led to a possible increase in supply.

Brent crude futures rose 0.3 percent to $91.01 a barrel, while US crude recorded $89.47 a barrel, up 0.1 percent.

Spot gold settled at $1,826 an ounce.

HF