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Asia Shares Surge as Easing Fed Rate Fears Boost Tech

Hong Kong’s Hang Seng tech index soared 4.71%, while technology heavyweights also lifted Japan’s Nikkei as commodity prices cooled


Asian stock markets were calm on Wednesday after tension about Nancy Pelosi visiting the island.
Investors were in cautious mood on Wednesday monitoring developments linked to Sino-US tensions. File photo: Reuters.

 

Asian stock markets began the week on the front foot with tech stocks leading the charge across the region.

Japan’s Nikkei rose for a third straight session, lifted by its heavyweight technology stocks, after a surge in Wall Street at the end of last week, while Hong Kong’s Hang Seng tech index soared 4.71%.

The advances came after Wall Street’s main indexes rallied on Friday as signs of slowing economic growth and a recent pullback in commodity prices cooled fears over the Federal Reserve’s rate-hike plans.

Tokyo’s Nikkei share average closed 1.43% higher at 26,871.27 points, after rising as much as 1.7%. The broader Topix jumped 1.12% to 1,887.42.

Technology investor SoftBank Group rose 3.71%, which provided the biggest boost to the Nikkei.

 

Also on AF: G7 Leaders Announce Ban on Russian Gold as Summit Begins

 

Hong Kong equities surged the most in three weeks, with tech giants climbing to their highest level since March 1, ahead of Chinese President Xi Jinping’s visit.

President Xi will visit Hong Kong for the 25th anniversary of the city’s handover to mainland China, marking his first known visit outside the mainland since January 2020 after the Covid-19 outbreak, state news agency Xinhua reported.

The Hang Seng index rose 2.4% to 22,229.52, while the Hang Seng Tech Index soared, with index heavyweights Alibaba and Meituan both up more than 3%.

However, Tencent fell 1.6% as Dutch technology investor Prosus NV, announced it will gradually sell down its massive stake in the Chinese social media giant.

On the mainland, China stocks rose for a third consecutive session with tourism and consumer sectors leading gains, as Shanghai’s top party boss declared victory over Covid-19 after the city reported zero new local cases for the first time in several months.

The blue-chip CSI300 index rose 1.1%, to 4,444.26, while the Shanghai Composite Index gained 0.9% to 3,379.19 points.

Elsewhere across the region, markets in South Korea and Taiwan rose by more than 1%, while Indian stocks were up too, with Mumbai’s signature Nifty 50 index up 0.98%, or 153.60 points, at 15,852.85.

 

Oil Prices Boost Sentiment

Globally, shares extended their bounce on Monday, building on Friday’s strong Wall Street close as off-peak oil prices helped sentiment improve and temper fears of prolonged inflation.    

Strong morning gains in Europe and Asia’s rally after China further eased Covid-19 restrictions drove the MSCI’s benchmark for global stocks up for a third straight session, rising 0.5% by 0851 GMT. 

Despite the strong three-day rebound, which helped lift the MSCI world benchmark further above the November 2020 lows hit earlier this month, the index remains down more than 20% from its record-high close in January, a fall that is commonly described as a bear market. 

Traders said oversold market conditions and month-end portfolio rebalancing also contributed to the bounce, although they expected more volatility ahead as the second-quarter earnings season approaches.  

Oil was volatile as the market grappled with concerns over an economic slowdown versus worries about lost Russian supply amid sanctions over the war in Ukraine.  

Brent prices rose 0.2% to $113.36 a barrel and US West Texas Intermediate futures dipped 0.1% at $107.52.

 

Dollar Index Drops

US 10-year Treasury yields stood just above 3% as traders removed bets for hikes next year but still pondered aggressive tightening this year. They were up 2 basis points at 3.16%, off an 11-year high reached earlier this month.

“The market remains focused in the trade-off between the policy response to high inflation and fears of a hard landing,” Westpac rates strategist Damien McColough wrote in a note.

The dollar continued to consolidate near the lowest since the middle of the month against major peers, as traders reassessed the prospects of aggressive rate hikes. 

The dollar index, which measures the currency versus six rivals, was down 0.2% at 103.82.  

Bitcoin was flat, trading at $21,170.88 after falling as low as $17,588.88 earlier this month.

 

Key figures

Tokyo – Nikkei 225 > UP 1.43%  at 26,871.27 (close)

Hong Kong – Hang Seng Index > UP 2.35%  at 22,229.52 (close)

Shanghai – Composite > UP 0.88%  at 3,379.19 (close)

New York – Dow > UP 2.68%  at 31,500.68 (Friday close)

 

  • Reuters with additional editing by Sean O’Meara

 

 

Read more:

Tencent Shares Fall After Naspers Says It’ll Sell Stake

China Drafts New Rules to Bolster Anti-Monopoly Oversight

China’s PBOC Boosts Cash Injection Into Banking System

 

Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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