Stocks in Asia Climb, Dollar Maintains Its Advance
Stocks in Asia rose and the dollar traded at its highest since January, while investors maintained focus on the U.S. Treasury market, where the 10-year note flirted with 3 percent.
The greenback preserved overnight gains, with the 10-year Treasury yield remaining just below its highest level since 2014. As the yen retreated, equities in Japan climbed, with indexes in Hong Kong and Australia also higher. Chinese shares rallied on signs the government is moving to ease some policies that it had sought to rein in a credit binge in some parts of the economy.
South Korean shares fell as SK Hynix Inc. continued a pattern seen from a string of semiconductor makers where earnings disappointed investors. United Co. Rusal surged more than 30 percent in Hong Kong trading after the U.S. softened its position on sanctions against the aluminum producer.
Investors are questioning the implications of rising bond yields that were in part spurred by higher commodity prices and concern surrounding their inflationary effect on the wider economy. Volatility in interest-rate markets remains low and equity volatility is well off the highs from earlier this year, indicating investors believe rising borrowing costs may not be enough to derail further stock gains for now.
“For us it’s more the reasons why we’re seeing the move: better growth outlook, a little bit more inflation and faster rate hikes being priced in by the market,” Kerry Craig, Melbourne-based global market strategist at JPMorgan Asset Management, told Bloomberg TV. “It should be reaffirming the fact that we see a global economy that’s looking relatively healthy.”
Technology stocks have been under pressure with a swath of companies reporting disappointing earnings and raising questions about the outlook for smartphones. The Philadelphia Semiconductor Index is down more than 7 percent over the past four days.
Elsewhere, aluminum extended its biggest slump since 2005 after the Treasury Department signaled it may lift Rusal sanctions if Oleg Deripaska divests control.
Courtesy : Bloomberg
Photo : Punditax.com
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