Wall Street relief rally spans Asia
Asia-Pacific stocks rose as global sentiment cleared following a rebound on Wall Street led by big tech stocks including Tesla, Apple and Amazon.
The Chinese CSI 300 index of stocks listed in Shanghai and Shenzhen climbed 1.3% on Wednesday morning, rebounding from a drop of around 2% the day before.
Japan’s Topix added 0.2 percent while Hong Kong’s Hang Seng index rose 0.9 percent as state-run China Telecom rose 9.8 percent after increasing announced plans for a second listing in Shanghai.
The gains in Asia follow a rescue rally in the United States as investors grabbed stocks hit by a sell-off during the previous session, ignoring fears that rising Treasury yields could undermine historically high valuations.
The technology-driven Nasdaq composite closed 3.7 percent in its best one-day performance since November, one day after falling into correction territory. Tesla shares rose 20%, while Apple and Amazon each gained around 4%.
The larger S&P 500 index gained 1.4%.
Recent declines have been dominated by investors abandoning big tech companies and other so-called growth stocks that have performed well during the pandemic in favor of more economically sensitive stocks such as banks and airlines. . about to enjoy it improving global outlook.
The rise in long-term interest rates, supported by higher growth expectations, also weighed on the stock markets, with higher borrowing costs seen as detrimental to future cash flows from high-value stocks, especially in the tech sector.
“Stocks behave in a way we thought was plausible with the value rotation [investing]Said Tobias Levkovich, chief US equity strategist at Citigroup. “We argue this may continue as economic data improves and inflation numbers worry [Wall Street]. “
US government debt also extended its rebound on Tuesday, with the 10-year US Treasury yield falling about 0.05 percentage point to 1.537%. Yields fall as bond prices rise.
T-bills were little moved in Asian trading, but investors expected a Treasury Department Auction Wednesday of $ 38 billion in 10-year bonds, followed by a sale of $ 24 billion in 30-year bonds on Thursday. Some analysts have expressed concern about the lack of demand for incoming supply in the world’s largest government bond market.
Futures have tipped US stocks lower when trading begins on Wall Street, with the S&P 500 expected to fall 0.3%. The FTSE 100 was expected to drop 0.5%.