Global Market Asian tech stocks rise with dollar gain
Asian tech stocks moved higher on Thursday, following US stocks. Although the larger gains were limited by the strength of the US dollar, as investors gambled on a faster rate hike in the US than other major economies. European stocks were expected to rise in early trading, with Euro Stocks 50 futures gaining 0.5% and FTSE futures gaining 0.24%.
Asian tech stocks rose following US-listed competitors on Thursday, although investors expected the US to rise faster than other major economies, limiting widespread gains by the stronger US dollar.
European stocks were expected to rise in early trading, with Euro Stocks 50 futures gaining 0.5% and FTSE futures gaining 0.24%. Japan’s Nikkei rose 0.8%, supported by shares of tech companies like Sony, which rose 1.5%, while the Hong Kong tech index fell in six sessions, up 0.85% from a 0.25% gain by local standards.
Alibaba (2.7% increase) in the heavyweight division took the lead. Analysts say the gains followed overnight gains in US tech stocks as investors judged the sell-off on prospects of a US rate hike was overdone.
However, movements in other sports were more restrained. MSCI, the widest Asia-Pacific stock index outside of Japan, traded flat on both sides and finally gained 0.06%. In a nutshell, Fook Hien Yap, Senior Investment Strategist, Wealth Management at Standard Chartered Bank, said, “When it comes to regional stock allocations, we’re seeing the US dollar hitting new highs and discouraging emerging market equities.” The dollar is trading at 115.3 yen versus the Japanese currency, a nearly five-year high, and is testing the nearly 18-month high of $1.1211 versus the euro. To support the dollar, several US Fed policymakers said they would be willing to cut back on central bank bond-buying programs if inflation persists and take faster action to raise rates, the minutes of the Fed’s November 23 policy meeting.
“Currently, the market is expecting more than two price increases over the next year, but I think it’s too aggressive. We expect only one increase next year,” said Yap. While these expectations were inconsistent, they pushed U.S. Treasury yields up. The benchmark 10-year yield rose 1.6930% to 1.6427% on Wednesday.
US Treasury bonds are closed on Thursday due to the Thanksgiving holiday. The US stock market is also closed, with shorter sessions on Friday. In other central bank news, the Bank of Korea raised its policy rate by 25 basis points as expected on Thursday as concerns over rising household debt and inflation offset uncertainty over the spread of the coronavirus.
Oil prices rose slightly after turbulent days when the US said it would release millions of barrels of oil from its strategic stockpiles, working with China, India, South Korea, Japan, and the UK to lower oil prices in response to OPEC demands. Pumping was more noticeable. However, investors questioned the effectiveness of the program, which led to price increases. Brent crude rose 0.33% to $82.53 a barrel, and US crude oil price rose 0.2% to $7,856 a barrel. Spot gold rose 0.17% to 1791 per ounce.