© Reuters. FILE PHOTO: A man watches an electric board showing Nikkei index outside a brokerage at a business district in Tokyo, Japan, June 21, 2021. REUTERS/Kim Kyung-Hoon
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By Julie Zhu
HONG KONG (Reuters) -Asian shares rose on Friday on prospects for a steady economic recovery in China, and after Wall Street reversed losses overnight following remarks by the Atlanta Federal Reserve chief that signalled a measured approach raising U.S. interest rates.
Global markets have been buffeted by a raft of strong U.S. data over recent weeks, including U.S. jobless claims overnight, that suggested the Fed would need to keep rates higher for longer.
But investors breathed a sigh of relief after Atlanta Federal Reserve President Raphael Bostic said he favoured “slow and steady” quarter-point U.S. rate increases to limit risk to the economy.
Investors were also waiting to see what economic targets are set by China’s parliament, and who it elects to top economic posts. The parliament’s annual meeting opens on Sunday.
Investors’ appetite for holding riskier assets has improved lately on signs that the world’s second-biggest economy is making a steady rebound after the government ditched stringent COVID controls in December.
“Everyone is eyeing China’s growth target for 2023 and wondered whether it would be 5%, 5.5% or even as high as 6%. The figure would represent the size of the government’s policy stimulus. That’s what the market and investors care about the most,” said Zhang Zihua, chief investment officer at Beijing Yunyi Asset Management.
European markets were set for a higher open, with pan-region Euro Stoxx 50 futures up 0.59%, German DAX futures up 0.39% and FTSE futures advancing 0.31%.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.7%, on track for its first weekly rise in five. The index is up 1.6% so far this month. U.S. stock futures, the S&P 500 e-minis, were down 0.13%, but the major indexes ended up in regular trading overnight.
Australian shares were up 0.39%, helped by gains in miners and financials, while Japan’s Nikkei stock index rose 1.57%, jumped to its highest in nearly three months.
China’s blue-chip CSI300 index was up 0.2% in afternoon trade while the Shanghai Composite Index gained 0.34%. Hong Kong’s Hang Seng index advanced 0.89%.
U.S. stocks rose on Thursday, reversing earlier losses, as Treasury yields pulled back from earlier highs, following the rates comments from Atlanta Fed President Bostic.
The Dow Jones Industrial Average rose around 1%, while the S&P 500 and Nasdaq Composite both gained around 0.75%, even as Tesla (NASDAQ:TSLA) Inc fell nearly 6% after the company failed to impress investors with few details on its plan to unveil an affordable electric vehicle.
The yield on benchmark 10-year Treasury notes touched 4.0501% compared with its U.S. close of 4.073% on Thursday. The two-year yield, which rises with traders’ expectations of higher Fed fund rates, rose to 4.8879%compared with a U.S. close of 4.904%.
Turning to the foreign exchange market, the dollar index, which tracks the greenback against a basket of other major currencies, was down at 104.82. The index is now up more than 1% for the year, but still down from a September high around $114.
The dollar eased 0.11% to 136.61 yen, after climbing to 137.10 overnight, the highest since Dec. 20.
The European single currency was up 0.1% on the day at $1.0611, having gained 0.33% in a month, after moving off a nearly two-month low of $1.0533 at the start of the week.
In the energy market, oil prices remained firm, boosted by signs of a strong economic rebound in top crude importer China and easing worries of aggressive U.S. rate hikes.
U.S. crude dipped 0.13% to $78.06 a barrel. Brent crude touched $84.66 per barrel.
Gold was slightly higher. Spot gold was traded at $1840.28 per ounce. [GOL/]
Source: Investing.com