Asia shares ease as caution persists despite calmer markets

Reuters NEW YORK | Updated on February 04, 2021

Asian stocks came under pressure on Thursday as a mixed Wall Street session gave investors few immediate reasons to increase their risk positions following the recent social media-driven trading chaos.

Markets have calmed significantly in the past few days with the Cboe Volatility index down on Wednesday as wild swings in stock prices of GameStop and other social media favorites subsided and the retail trading frenzy faded.

However, caution continues to dominate sentiment despite positive corporate earnings and firm signs of economic recovery.

The Australian S&P/ASX 200 index lost 0.34 per cent during early trade and Japan's Nikkei 225 fell 0.35 per cent.

The lackluster start to Asian trade followed a mixed Wall Street session with the Dow Jones Industrial Average up 0.12 per cent, the S&P 500 gaining 0.10 per cent, but the Nasdaq Composite losing 0.02 per cent.

Supporting US sentiment were strong earnings by technology giants Alphabet Inc and Inc.

The Google parent company's beat sent shares soaring nearly 7 per cent on Tuesday, but some analysts warned the move was too extreme.

"After lagging its FAANG peers in 2020, shares of Alphabet are making up for lost time in 2021," said Paul Hickey of Bespoke Investment Group.

"You'd expect GOOGL to at least consolidate a bit beforeit's able to build on (year-to-date) gains."

E-mini futures for the S&P 500 inched 0.26 per cent higher while Hong Kong's Hang Seng index futures lost 0.16 per cent.

MSCI's gauge of stocks across the globe gained 0.04 per cent.

Currency and commodities

Oil markets continued to advance as inventories hit their lowest level since March. US crude recently rose 0.45 per cent to $55.94 per barrel and Brent was at $58.67, up 2.11 per cent on the day.

US Treasury yields continued to rise on the hopes of a large stimulus package and the dollar strengthened against a basket of currencies as investors felt more confident in the US recovery trajectory than in Europe's recovery. The benchmark 10-year yield was last up 3.2 basis points at 1.1391 per cent.

The 30-year bond was last up 4.9 basis point at 1.9267 per cent, while the 20-year yield hit 1.735 per cent, its highest level since that bond maturity was relaunched in May 2020.

The dollar index was up 0.07 per cent at 91.145 in afternoon trading in New York after rising to a two-month high of 91.308during the session.

Spot gold fell 0.2 per cent to $1,833.93 per ounce and US gold futures settled up 0.1 per cent at $1,835.10.

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Published on February 04, 2021
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