Asian stocks were supported on Thursday by robust corporate earnings
that helped Wall Street quell concerns about the surge in U.S. bond
yields. However, sagging Chinese shares limited the upside potential of
the market.
Spreadbetters expected European stocks to open higher off the back of firm U.S. stocks, pointing to a rise in Britain’s FTSE of 0.1 percent, an increase in Germany’s DAX of 0.4 percent and in France’s CAC of 0.4 percent.
The dollar hovered near 3-1/2-month highs against a basket of currencies, supported by the rise in U.S. long-term debt yields to a four-year peak.
South Korea’s KOSPI climbed 1.3 percent, with tech shares buoyed by news of a record quarterly profit from Samsung Electronics.
The region’s other gainers included Japan’s Nikkei, which rose 0.5 percent and Thai and Malaysian stocks.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.15 percent, as weaker Chinese stocks weighed on the market.
The benchmark Shanghai Composite Index fell 0.9 percent and the blue-chip CSI300 index dropped 1.4 percent as tech shares came under pressure following news that U.S. prosecutors have been investigating if China’s Huawei violated U.S. sanctions on Iran.
The Dow Jones Industrial Average rose 0.25 percent on Wednesday, ending five consecutive sessions of losses, and the S&P 500 gained 0.18 percent on optimism over a spate of upbeat earnings that managed to offset jitters about rising U.S. bond yields.
The rise in the 10-year U.S. Treasury yield to a four-year peak above 3 percent had weighed on stocks amid concerns higher costs to borrow could dampen corporate profits.
Nonetheless, the broader equity market reaction to the latest jump in U.S. yields appeared to be more measured compared to February, when a similar spike in rates sent stocks tumbling.
“The equity markets slid sharply in January and March in response to the rise in Treasury yields. But the Federal Reserve signaled in March that its rate hikes would be gradual,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
The 10-year yield rose to 3.035 percent on Wednesday, its highest since January 2014. The yield has climbed on expectations of a steady U.S. economic expansion, accelerating inflation and concerns about increasing debt supply. It last stood at 3.031 percent.
U.S. yields have dragged up their European counterparts, with 10-year German bund reaching a six-week high of 0.655 percent and its British Gilt equivalent setting a nine-week peak of 1.57 percent this week.
Spreadbetters expected European stocks to open higher off the back of firm U.S. stocks, pointing to a rise in Britain’s FTSE of 0.1 percent, an increase in Germany’s DAX of 0.4 percent and in France’s CAC of 0.4 percent.
The dollar hovered near 3-1/2-month highs against a basket of currencies, supported by the rise in U.S. long-term debt yields to a four-year peak.
South Korea’s KOSPI climbed 1.3 percent, with tech shares buoyed by news of a record quarterly profit from Samsung Electronics.
The region’s other gainers included Japan’s Nikkei, which rose 0.5 percent and Thai and Malaysian stocks.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.15 percent, as weaker Chinese stocks weighed on the market.
The benchmark Shanghai Composite Index fell 0.9 percent and the blue-chip CSI300 index dropped 1.4 percent as tech shares came under pressure following news that U.S. prosecutors have been investigating if China’s Huawei violated U.S. sanctions on Iran.
The Dow Jones Industrial Average rose 0.25 percent on Wednesday, ending five consecutive sessions of losses, and the S&P 500 gained 0.18 percent on optimism over a spate of upbeat earnings that managed to offset jitters about rising U.S. bond yields.
The rise in the 10-year U.S. Treasury yield to a four-year peak above 3 percent had weighed on stocks amid concerns higher costs to borrow could dampen corporate profits.
Nonetheless, the broader equity market reaction to the latest jump in U.S. yields appeared to be more measured compared to February, when a similar spike in rates sent stocks tumbling.
“The equity markets slid sharply in January and March in response to the rise in Treasury yields. But the Federal Reserve signaled in March that its rate hikes would be gradual,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
The 10-year yield rose to 3.035 percent on Wednesday, its highest since January 2014. The yield has climbed on expectations of a steady U.S. economic expansion, accelerating inflation and concerns about increasing debt supply. It last stood at 3.031 percent.
U.S. yields have dragged up their European counterparts, with 10-year German bund reaching a six-week high of 0.655 percent and its British Gilt equivalent setting a nine-week peak of 1.57 percent this week.
No comments:
Post a Comment