Beijing, Mar 23: Asian stock markets were mixed Tuesday after Wall Street rose on gains for tech stocks and reassurance by the US Federal Reserve of support for an economic recovery.
Tokyo and Sydney advanced while Shanghai, Hong Kong and Seoul retreated.
Overnight, Wall Street’s benchmark S&P 500 index rose 0.7 per cent as big technology companies led stocks broadly higher. Amazon, Apple, and Microsoft advanced.
Fed Chairman Jerome Powell said that while the economy was improving, a recovery is “far from complete.” In testimony to Congress, he said the Fed “will continue to provide the economy the support it needs for as long as it takes.”
Powell “kept markets happy” by saying “there was still a long way to go” before tighter monetary policy is justified, Robert Carnell of ING said in a report.
The Shanghai Composite Index lost 0.6 per cent to 3,421.88 while the Nikkei 225 in Tokyo rose 0.2 per cent to 29,243.44.
The Hang Seng in Hong Kong fell 1 per cent to 28,586.11. Chinese search engine operator Baidu Inc. Rose 1 per cent on its first trading day after the company joined the Hong Kong exchange and raised USD 3.1 billion in a share sale.
The Kospi in Seoul shed 0.4 per cent to 3,023.54 while Sydney’s S&P-ASX 200 gained 0.1 per cent to 6,761.10. New Zealand and Singapore advanced.
Investors are wavering between optimism that coronavirus vaccines that might allow business and travel to return to normal and fears of higher inflation after struggling economies were flooded with credit and government spending.
They have been reassured by Powell’s comment earlier that the Fed’s key interest rate will be kept near zero through 2023 even as inflation is forecast to pick up.
On Wall Street, the S&P 500 rose to 3,940.59. The Dow Jones Industrial Average advanced 0.3 per cent to 32,731.20. The Nasdaq climbed 1.2 per cent to 13,377.54.
Amazon rose 1.2 per cent and Apple gained 2.8 per cent, while Microsoft rose 2.4 per cent.
Shares were boosted by a rise in bond prices, which narrowed their yield, or the difference between their market price and the payout at maturity. A rise in yields has been luring investors out of higher-priced tech stocks.
The yield on the 10-year Treasury note narrowed to 1.69 per cent after trading as high as 1.74 per cent last week. The possibility of higher interest rates as yields rise has some investors concerned economic growth might slow.
Also Monday, Kansas City Southern jumped 11.1 per cent for the biggest gain in the S&P 500 after a Canadian railroad announced it would buy the company for USD 25 billion.
Stocks ended last week in the red as a rise in bond yields caused selling in many parts of the market. (AGENCIES)
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