Asian stocks backed by Banner Day for Wall Street
Stocks in the Asia-Pacific region were broadly higher on Tuesday, a day after Wall Street posted its best performance in nearly nine months as a rebound in public debt eased investor nerves.
The Hong Kong benchmark Hang Seng Index climbed 0.6 percent in morning trading, while China’s CSI 300 index of stocks listed in Shanghai and Shenzhen added 0.3 percent. The Australian S & P / ASX 200 gained 0.4 percent.
Japan’s Topix broke ranks with the region, losing 0.3% after finalized data showed fourth-quarter capital spending fell nearly 5% from a year ago. This deviated markedly from a preliminary reading showing an increase of 4.5 percent and raised questions about the strength of the country’s economic recovery.
Movements in Asia followed a banner session for Wall Street, which closed with a 2.4% rise for the blue-chip S&P 500 and a 3% rally for the tech-focused Nasdaq.
The equity gains came as public debt markets extended their last week’s sale. The 5-year U.S. Treasury yield, which was at center of turmoil, fell 0.03 percentage points on Monday. The 5-year yield fell another 0.1 percentage point to 0.69 percent in Asia on Tuesday, while the 10-year yield was down the same amount at 1.41 percent. Bond yields fall as prices rise.
“While it may be tempting to conclude that the stock market is getting used to higher returns, it also means that it removes one of the barriers to further higher returns,” said Robert Carnell, head of Asia-Pacific research at ING. . “What would undermine an uptrend in bond yields would be a big collapse in risk appetite.”
Australian bond yields were broadly flat, with the 10-year rate falling 0.1 percentage point to 1.642 percent. This follows a fall of nearly 0.25 percentage point to 1.67% on Monday after the Reserve Bank of Australia doubled the size of its regular purchases of long-term bonds as borrowing costs have skyrocketed.
The focus shifted to the RBA’s interest rate decision later on Tuesday, with the central bank expected to keep its cash rate target at a record 0.1%.
“Australia has shown strong external resilience despite increasing trade tensions with China, the Covid pandemic and earlier after the slowdown in global trade caused by Trump-era tariffs,” Josh said. Williamson, chief economist of Australia at Citigroup, which recently improved the country’s fourth-quarter growth forecast will stand at 2.9%.
In commodities markets, oil prices continued to decline ahead of an Opec + meeting this week that could lead to increased supply. Brent, the international benchmark, fell 1.7% to $ 62.62 a barrel while West Texas Intermediate, the US marker, fell by the same amount to $ 59.58.
Futures tipped the S&P 500 down 0.2% as trading on Wall Street resumed.