Asian shares steady as Chinese markets return, U.S. yields gain

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HONG KONG (Businesshala) – Asian stocks edged higher on Friday, and were set to break a four-week streak of weekly losses as Chinese markets turned slightly more positive after a long holiday, encouraged by a survey that showed the services sector’s strength Activity showed improvement.

FILE PHOTO: An electric board shows the Nikkei index outside a brokerage in a business district in Tokyo, Japan, June 21, 2021. Businesshala / Kim Kyung-hoon

In the bond market, a US Senate approval law to temporarily raise the federal government’s debt limit sparked a selloff that pushed US Treasury benchmark yields to their highest level since June ahead of key jobs data.

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Japan’s Nikkei index advanced 1.8%, and MSCI’s broadest index of Asia-Pacific shares outside Japan traded on either side of the flat, having lasted 0.03% but set to gain 0.6% in the week, Thursday. Its the best week in a month to profit. .

US 500 S&P futures were flat and pan-region Euro Stoxx 50 futures were down 0.1%, also suggesting yesterday’s global rally is waning.

Asian benchmarks were supported by progress in Chinese blue chips, which rose 1.07% as trading resumed after the week-long National Day holiday. The recovery sentiment partly stemmed from a private sector survey that showed China’s services sector activity picked up in September.

Over the past three months, Chinese stocks have been battered by regulatory changes, turmoil in the property sector and the recent power outage, but some investors are now seeing a buying opportunity.

“The debate on China is going a little far from being too negative. People are asking ‘Is there a way out of regulatory uncertainty? How much of that is reflected in prices?’, said Harald van der Linde, Asia Pacific head of equity strategy at HSBC.

“We’re neutral, we tell people not to be too negative because valuations are low.”

However, bonds and shares issued by Chinese property firms fell on Friday with no sign of a resolution to cash-strapped China Evergrande Group’s debt problems, affecting sentiment in the broader sector.

Elsewhere, Australian shares rose 0.84%, helped by mining stocks amid rising commodity prices, but Hong Kong fell 0.26%.

Also supporting the risk sentiment was the US Senate’s approval of legislation to temporarily increase the federal government’s debt limit and avoid the risk of historic default.

It fueled a sell-off in US government bonds, and 10-year US Treasury yields rose to 1.5940% in early Asian trade, hitting their highest level since mid-June when they touched similar levels. They were last at 1.5925%.

Traders are also awaiting US payrolls data for September, which will expire later in the global day. They expect employment figures that are closer to consensus will lead the Federal Reserve to indicate at its November meeting when it will begin to ease its massive stimulus program.

Analysts at CBA said it is possible that the jobs figures could surprise the decline, but “we think this will be a huge omission, as we are hoping to prevent. [Federal Reserve] From announcing a taper in November. “

He added that a strong payroll print would support the US dollar as it would signal an imminent bearish move.

While traders waited for those figures, the dollar index, which measures the greenback against a basket of its peers, was little changed at 94.278, not far from the 12-month high it hit at 94.504 at the end of September.

It rose slightly against the yen, buying 111.87 yen.

Oil prices continued to fluctuate, with some industries switching from high-priced gas to oil and doubts the US government would release oil from its strategic reserves for now.

Brent crude rose 1.2% to $82.94 a barrel, hitting a three-year high of $83.47 a barrel, while US crude rose 1.39% to $79.38 a barrel, hitting its seven-year high of $79.78 this week. reached at. [O/R]

Editing by Ana Nicolasi da Costa and Simon Cameron-Moore


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