© Reuters. FILE PHOTO: A man wearing a protective mask, in the middle of an outbreak of coronavirus disease (COVID-19), walks past an electronic board showing the Shanghai Composite Index, Nikkei Index and Dow Jones Industrial Average outside a brokerage house in Tokyo, Japan , March 7,
By Tom Westbrook
SINGAPORE (Reuters) – Asian stocks hit a three-week high on Wednesday as investors fled a meltdown in bond markets seeking refuge in cash, carry trades and slumping sectors such as technology, while the Ukraine conflict threat to supplies kept oil prices steady.
MSCI’s broadest Asia-Pacific equities index outside Japan rose 1% to its highest since early March, with large gains in technology companies in Hong Kong leading. ()
In Japan, cars came along as they rose 3%.
European futures last rose 0.8% and futures rose 0.5%, though things were more subdued for US futures, which rose 0.2% after rising on Tuesday. [.N]
Violent e-commerce giant Alibaba (NYSE :), which recently expanded a buyback program, rose 6%, and in Tokyo, technology investment firm SoftBank Group rose 7%.
“(Stocks) sold too much and you see a bit of a rally,” said Jun Bei Liu, a portfolio manager at Tribeca Investment Partners in Sydney, but added that it had the taste of hedge fund card coverage rather than new money piling up. sig in. .
“We’re facing a lot of rate hikes that are going to put a lid on valuation. We just do not want to see the kind of valuation expansion we’ve seen over the last many years.”
Still, stock resilience has been remarkable in the face of very strong bond dumping since the US Federal Reserve gave polite guidance at its March meeting, and President Jerome Powell sounded even more aggressive in a speech Monday.
The losses extended in early Asian trade were then moderated, leaving the benchmark 10-year government interest rates, which rise when prices fall, up by 2 basis points (bps) to 2,4009% and have risen as much as 58 basis points for the month so far.
Two-year government interest rates, an increase of 76 bp in March, stabilized at 2.1796%.
“The movement of higher interest rates over the past two weeks has been the largest since the global financial crisis, and even then the movements were within a few basis points of what we are experiencing now,” said NatWest Markets interest rate strategist Jan Nevruzi.
“At some point, the market may begin to price an economic downturn, especially if the Fed embarks on a series of 50 bp increases.”
Among the events expected later on Wednesday, UK inflation data was set to be released at. 0700 GMT, while speeches by Powell and Fed officials James Bullard and Mary Daly would also be watched for clues about the interest rate outlook.
Rising interest rates elsewhere and rising oil prices have sent the Japanese yen into a slump by sucking money abroad in pursuit of better yields and paying off energy imports.
The yen fell 5% against the dollar in March, reaching a six-year low of 121.41 in the Asia session. [FRX/]
Higher returns, among larger currencies, have been favored, and the dollar and New Zealand have hit their strongest levels on the dollar since last November. [AUD/]
Both stayed near the peaks with the Aussie
The euro held at $ 1.1036.
Commodity markets have been kept on edge by expected supply disruptions from the war in Ukraine and were adamant about a lack of tangible progress towards peace.
Oil stabilized at highs, with futures rising 1% to $ 116.67 a barrel and up 1% to $ 110.34. [O/R]
Grain prices continued to be supported by supply concerns, especially for delivery later in the year. [GRA/]
“These gains are a sign that the market is set to be without much Black Sea supply well into the 2022 season,” said Tobin Gorey, an Agricultural Commodity Strategist at the Commonwealth Bank of Australia (OTC 🙂 in Sydney.