Tech stocks climbed in Asia, following U.S. peers higher. The Chinese property stocks rallied following a surprise interest payment by debt-ridden property developer China Evergrande Group. Also, the cyclical stocks dragged amid worries that central bankers will need to tighten monetary policy into slowing growth in order to tackle persistent inflation. Regional bond yields rose with those on U.S. Treasuries. This is where the market priced in higher inflation by narrowing the spread between short- and long-term yields.
The dollar held gains from overnight. This is because of the better jobs and housing data boosted the case for a faster tapering of Federal Reserve stimulus. Japan’s Nikkei rose 0.7% led by technology shares. The broader Topix added 0.3%, with a 0.6% jump in the Topix growth index. Chinese blue chips gained 0.3%. This is with the CSI300 Real Estate Index rising 2.5%. Hong Kong’s Hang Seng rose 0.4%. Australia’s benchmark index slipped 0.2%.
China Evergrande Group wired funds to a trustee account for a dollar bond interest payment. The stock jumped 5.4%. MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.1%. S&P 500 E-minis futures slipped 0.1%. This is after the cash index posted a record closing high overnight. The S&P 500 added 0.3%. The Nasdaq Composite rallied 0.6%. The so-called FAANG giants report earnings such as the Facebook, Apple, Amazon, and Google-owner Alphabet. Netflix diluted earnings-per-share came in at $3.19.
Kyle Rodda, a market analyst at IG Australia stated that the narrative over the last couple of days has been earnings focused and tech stocks have led the charge. There’s momentum there, simple as that. Also, concerns over growth and inflation has raised speculation. Oil prices resumed their climb, after dropping back from multi-year highs reached earlier in the week.
Brent crude added 0.2% to $84.77. The number of Americans filing new claims for unemployment benefits dropped to a 19-month low. Yields on benchmark 10-year Treasury notes were at 1.6922%. The dollar index, which gauges the greenback against six major rivals, was largely flat at 93.730. The Fed has signaled it could start to taper stimulus as soon as next month.