Market Close Mar 09

Economic recovery hopes boost markets

US Treasuries surge as Yellen said “there are tools” to deal with inflation; China underperforms on debt curb fears; PIMCO sees limited scope for yields to rise

Economic recovery hopes boost markets
The chimneys of the Total Grandpuits oil refinery are seen just after sunset, southeast of Paris, France, March 1, 2021. Oil rose to $69 a barrel on Tuesday as investors focused on prospects for tighter supply due to extended OPEC+ output curbs and amid growing hopes of a recovery in demand. File photo by Christian Hartmann /Reuters.

(ATF) Hong Kong: Asian markets were broadly higher after economic recovery hopes brightened ahead of the launch of the vast US stimulus package and on confidence the risk of inflation was manageable. 

But Mainland China’s market underperformed as investors digested National People’s Congress (NPC) takeaways that revolved around less credit and stabilisation in Chinese markets' leverage.

Japan’s Nikkei 225 index advanced 0.99%, Australia’s S&P ASX 200 added 0.47% and Hong Kong’s Hang Seng index jumped 0.81% but China’s CSI300 underperformed and slipped 2.15%.

Regionally, the MSCI Asia Pacific index rose 1.27%.

“The magnitude of fiscal stimulus and accommodative monetary policy in response to the pandemic has positioned 2021 to be a recovery year, alongside vaccine rollouts that should help the US and the world rebound from the negative effects of Covid-19 on economic activity and employment,” Marc Seidner, PIMCO’s CIO for Non-traditional Strategies, said. 

He said the extent of the bond market sell-off in early 2021 suggests inflation expectations may have run too far and with a more balanced outlook for inflation, and after the yield curve had steepened significantly in recent months, there may be limitations on how much further yields can climb for now.

“We are cautiously optimistic on the pace of that recovery”

US Treasuries rallied with the 10-year yields declining 7 basis points to 1.53% over relief that inflation risks are manageable.

US Treasury Secretary Janet Yellen said “there are tools” to deal with inflation and the coronavirus aid package would provide enough resources to fuel a “very strong” US economic recovery.

ATF China Bond 50 Index: Coupon payout drags down inflation-worried bonds

Also on Asia Times Financial

 

Foreign Exchange: Yuan swings higher on dollar selling

Asia Stocks

· Japan’s Nikkei 225 index advanced 0.99%

· Australia’s S&P ASX 200 added 0.47% 

· Hong Kong’s Hang Seng index jumped 0.81%

· China’s CSI300 slipped 2.15%

· The MSCI Asia Pacific index rose 1.27%.

Stock of the day

Geely Auto shares jumped as much as  5.7% after it reported total sales volume in the first two months of 2021 rose 76% from the same period last year, and achieving more than 15% of the group’s full year sales volume target of 1,530,000 units in 2021.

Asia markets Vaccine rollout buoyant sentiment bond market US Treasuries