Markets

Asian stocks edge higher, Wall Street retreats

Reuters Tokyo/New York March 3 | Updated on March 03, 2021

US dollar index down 0.2 per cent; oil prices were mixed

Asian shares edged higher on Wednesday as investors shrugged off concerns that stocks may have rallied too far too fast in the past year, and focused instead on optimism that more imminent US stimulus will energise the global economic recovery.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.44 per cent. Australian shares were up 0.62 per cent, while Japan's Nikkei stock index rose only 0.03 per cent.Shares in China gained 0.63 per cent .

Wall Street had retreated overnight after beginning March with a bang, with the S&P 500 staging its best one-day rally in nine months on Monday.

But some analysts warned that worries that stock prices may be frothy, a fear echoed by a top Chinese regulatory official on Tuesday, may make it harder for equity markets to hang on to gains. Fears that last week's sell-off in US Treasuries, which rattled stock markets, could resume also put a lid on stockprices, they said.

"While markets have stabilised..., the tone remains tenuous as investors continue to fear a further sell-off in rates,"analysts at TD Securities said in a note.

The cautious mood weighed on the US dollar, which has benefited in recent days from investor hopes that the United States will enjoy a faster economic recovery, and that the US central bank will be more tolerant of higher bond yields.

The US dollar index stood at 90.787, nursing a 0.2 per cent loss from the previous session.

The Australian dollar shined yet again, rising to $0.7828 after stronger-than-expected economic growth in the fourth quarter fuelled hopes for a V-shaped recovery from the coronavirus pandemic.

Benchmark US government bond yields dipped again for the third consecutive day as investors paused a recent sell-off ahead of a slew of US economic data that will be released later this week. The yield on 10-year Treasury notesstood at 1.4085 per cent, down from last week's high of 1.614 per cent.

The US stock market was roiled last week when benchmark yields spiked to a one-year high on investor bets that a strong U.S. economic rebound amid ultra-loose monetary conditions could fuel inflation.

US Federal Reserve officials have said that inflation concerns are premature, however, and warned that rising yields could tighten financial conditions and constrain an economicrecovery.

MSCI's broadest index of global stocks edged up by 0.05 per cent.

Oil prices were mixed, hitting a two-week low overnight on expectations that OPEC+ producers will ease supply curbs attheir meeting later this week as economies start to recover fromthe coronavirus crisis.

US West Texas Intermediate crude was little changed at $59.74 a barrel, while Brent futures rose 0.22 per cent to$62.84 a barrel.

Cryptocurrency bitcoin erased early losses and rose 0.62 per cent to $48,814. The digital asset is up 69 per cent so far this year as it gains more acceptance in mainstream financialcircles.

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Published on March 03, 2021
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