Asian shares climb as Wall Street rallies

Published On: May 25, 2021Categories: Stocks & Shares1.8 min read

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1%, Australian shares gained 0.69%, Nikkei added 0.6%, CSI300 index climbed 1.89%, and Hang Seng index advanced 1.05%

Asian shares climbed in morning trade on Tuesday, tracking a Wall Street rally overnight, while the dollar held near a fourth-month low as investors tempered fears about inflation-driven rate hikes

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1% at a two-week high, after U.S. stocks finished the previous session with mild gains.

Australian shares gained 0.69%, while Japan’s Nikkei stock index added 0.6%.

Chinese stocks hit a 2-1/2-month high on financial services, consumer and tourism gains in morning trade. The blue-chip CSI300 index climbed 1.89%, while the benchmark Shanghai Composite Index gained 1.39%, reaching their highest levels since early March.

Hong Kong’s Hang Seng index advanced 1.05%.

Markets were buoyed as data flow didn’t live up to the strong-inflation narrative, and amid repeated guidance from senior central bank figures that the current rise in inflation is temporary, ANZ analysts wrote in a note.

The U.S. national activity index reading of 0.24 against expectations above 1, along with dovish comments from Federal Reserve speakers, helped support the view that policy will remain on hold for some time.

Still, after global service sector surveys showed strong growth last Friday, the focus will be on the release of U.S. personal consumption data on Thursday.

Overnight, Wall Street finished higher, spurred by gains in tech stocks, with the sector’s majors Apple 1.33% higher and Microsoft up 2.29%.

The Dow Jones Industrial Average advanced 0.54% while the S&P 500 and the tech-heavy Nasdaq Composite added 0.99% and 1.41%, respectively.

Treasury yields, which dropped on Monday after a few Fed officials affirmed their support to keep monetary policy accommodative for some time, were little changed. The yield on benchmark 10-year Treasury notes was at 1.608%, near a two-week low.

I think there will come a time when we can talk more about changing the parameters of monetary policy, I don’t think we should do it when we’re still in the pandemic, Federal Reserve Bank of St. Louis President James Bullard said on Monday.

By early Tuesday, the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, edged down to 89.776, just above a four-month low. The European single currency rose 0.1% on the day at $1.2222, having added 1.7% in a month.

U.S. crude ticked up 0.21% to $66.19 a barrel. Brent crude reached $68.7 per barrel.

About the Author: Jonathan Adams

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