Stocks

Strong opening in China lifts Asian shares, but tech worries weigh

Reuters HONG KONG | Updated on April 20, 2021

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.2 per cent

Asian shares rose on Tuesday, led by a stronger Chinese opening and shaking off the initial drag from tech-driven Wall Street losses, while the dollar stayed at multi-week lows against other major currencies.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.2 per cent, swinging into positive territory after Chinese blue chips rose 0.13 per cent. South Korea gained 0.4 per cent.

Elsewhere, Japan's Nikkei dropped 1.84 per cent, as the country continues to grapple with a resurgence in COVID cases. Australia slipped 0.33 per cent.

Hong Kong fell 0.11 per cent although Chinese food delivery giant Meituan's shares rose 1.59 per cent after the company said it had raised a huge $9.98 billion through an equity and convertible bond sale.

Earlier, major Wall Street indexes drew back from record highs hit list week, with a big drag from Tesla Inc.

The electric-car maker slid 3.4 per cent after a Tesla vehicle believed to be operating without anyone in the driver's seat crashed into a tree on Saturday north of Houston, killing two occupants.

"This morning in Asia looks like a continuation of what we saw last night, where tech stocks got hit in the US," said Mick McCarthy, Chief Markets Strategist, CMC Markets.

McCarthy said that the falls in Japan were striking given the yen strength caused by the falling dollar, which would normally be supportive for Japanese stocks, adding he thought this would change one way or the other later in the day.

The tech-heavy Nasdaq was the biggest mover, falling 0.98 per cent, while the Dow Jones Industrial Average declined 0.36 per cent, and the S&P 500 0.53 per cent.

However, e-mini futures for the S&P 500 rose 0.13 per cent, suggesting markets could bounce back later in the day.

In currency markets, the dollar continued its recent weakness, falling further from six-week lows it hit on Monday.

"In our view, USD can remain heavy this week as focus shifts from US economic outperformance to the improving global economic outlook more broadly," wrote analysts at CBA in a research note.

In Asian trade, the dollar dropped 0.08 per cent against the yen,while the Australian dollar gained 0.14 per cent and the Euro gained 0.07 per cent on the dollar respectively.

The yield on benchmark 10-year Treasury notes rose to 1.6029 per cent compared with its US close of 1.599 per cent.

Oil prices continued to rise. US crude ticked up0.19 per cent to $63.50 a barrel, and Brent crude rose to $67.2per barrel.

Published on April 20, 2021

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