TOKYO – Asian shares rallied on Tuesday, chewed by a move near the U.S. stimulus package, although that outlook was fueled by concerns about inflation and a coronavirus outbreak.
Japan Nikkei 225 NIK benchmark,
added 0.6% in morning trade, and Kospi 180721 in South Korea,
slipped 1%. S&P / ASX 200 XJO Australia,
added 0.3%. Hang Seng HSI at Hong Kong,
gained 1.3%, while the Shanghai Composite SHCOMP,
slipped 0.2%. Stocks rose in Singapore STI,
but declined in Taiwan Y9999,
and Indonesia JAKIDX,
Jingyi Pan, a senior market expert with IG in Singapore, said Asian markets were measuring “the impact of a global recovery coupled with the expectation of a faster climb in U.S. bond yields. ”
Yoshimasa Maruyama, chief market economist for SMBC Nikko Securities, said that the global economic recovery is stronger than some previously expected, and that recognition is becoming more widespread in March than in February.
“And this recognition of his recovery in March will work as a source of greater confidence,” he said.
The distribution of the vaccine in the U.S. and Europe will also help boost confidence in future growth, he said.
Revised economic data for October-December, published on Tuesday, showed that Japan’s economy was growing at an annual rate of 11.7%. That was weaker than the 12.7% growth reported last month, in the first estimate.
Quarter to quarter, growth was at 2.8%, revised from 3%, with public and private investment less positive than initially expected. Japan’s economy expanded at a pace of 22.8% in the July-September period. That followed a sharp decline as the pandemic affected tourism, trade, consumption and production.
On Wall Street, U.S. stock indices closed mostly lower, as higher bond yields helped drive more stock sales in tech companies.
The S&P 500 SPX,
fell 0.5% to 3,821.35 after gaining 1% earlier. Due to its large size, fall with Apple AAPL,
Leading Google Alphabet GOOGL,
GOOG,
and other major technology stocks helped drag the S&P 500 into the red, even though more stocks rose than the index fell.
The sale, which accelerated near the end of the day, left the tech-heavy COMP-Nasdaq,
down 10.5% from the peak it reached on February 12. A fall of 10% or more from a recent peak on Wall Street is known as a “correction.”
Dow Jones industrial average DJIA,
rose 1% to 31,802.44.
Bond yields generally rose. Yields on the 10-year Finance note climbed to 1.60% from 1.55% late Friday. But it fell back to 1.57% after hours.
Yields have marched higher in anticipation of growth and the potential inflation. Higher yields put downward pressure on stocks in general, in part because they can turn potential dollars that may have entered the stock market into bonds instead. That makes investors less willing to pay such high prices for stocks, especially the more expensive-looking ones, such as tech stocks.
Investors have pledged to help trillions of dollars in future government incentives to lift the economy out of its malaria caused by coronavirus. There are also investors who are promising that stimulus and a growing economy will bring some inflation down the road.
The U.S. economic support package, narrowly passed by the Senate on Saturday, will provide direct payments of up to $ 1,400 for most Americans and extend emergency unemployment benefits. It is a victory for President Joe Biden and his Democratic allies, and a final transportation agreement is expected this week.
Oil prices have also been rising. After falling with the onset of the pandemic, as demand fell, prices have been improving. Last week, some observers expected OPEC cartels and its allies to lift more restrictions and allow the oil to flow more cheaply. But OPEC agreed to leave most of the restrictions.
In energy trading, the crude U.S. benchmark for April delivery of CLJ21,
16 cents fell to $ 64.89 a barrel. It fell $ 1.04, or 1.6% to $ 65.05 a barrel Monday. It is still up 32.8% so far this year. Brent crude BRNK21,
the international rate, lost $ 1.12 to $ 68.24 a barrel.
In foreign exchange trading, US dollar USDJPY,
it rose to 109.07 Japanese yen from 108.87 yen late Monday.