Asia Shares Set to Rise After S&P 500 and Dow Sets Optimistic Records
Asian equities are poised to rise on Tuesday after the S&P 500 and Dow indexes set records as a streak of strong U.S. economic data fueled optimism.
The survey from the Institute for Supply Management (ISM) on Monday showing activity in the U.S. services industry reached its highest level on record in March making the investors happy. The data beat forecasts with 916,000 added to the U.S. economy last month.
“The jobs report set the stage for what we’re seeing today,” said Thomas Hayes, chairman of Great Hill Capital LLC in New York. “It’s not only that the report crushed expectations but it showed that wage inflation was subdued as people compete for labor.”
Australian S&P/ASX 200 futures rose 0.34% in early trading, while Hong Kong’s Hang Seng index futures rose 0.40%.
With the rise of vaccinations, the S&P 500 and the Dow – the benchmark Wall Street indexes – have risen, boosting investor’s confidence in an economic rebound and spurred demand for sectors, including energy, financials and materials, which are primed to benefit from economic reopening.
“The rate of change with the 10-year yield has slowed and that has created a runway for some of the left behind sectors in recent weeks like tech and other yield sensitive areas like utilities,” Hayes said.
On Wall Street, Dow Jones Industrial Average rose 1.13% to a record high of 33,527.19, the S&P 500 gained 1.44% to a record 4,077.91 and the Nasdaq Composite added 1.67%, to 13,705.59.
As investors paused the recent selling of government bonds and took profit from short positions, U.S. Treasury yields edged lower on Monday.
Benchmark 10-year notes last rose 3/32 in price to yield 1.7127%, from 1.72% late on Friday. The yield curve steepened on Monday after flattening the previous session as the spread between U.S. 2-year and 10-year yields rose to 154 basis points.
Gold prices edged lower as the safe-harbour metal’s luster was dimmed by rising global equity prices.
Spot gold declined 0.1% to $1,727.98 an ounce. U.S. gold futures settled little changed at $1,728.80.
Oil prices fell as increasing OPEC+ supply and rising Iranian output, along with the threat of a new wave of COVID-19 infections, offset hopes for a demand rebound driven by economic revival.
U.S. crude settled at $58.65 per barrel, down 4.6% on the day, while Brent shed 4.18% to end at $62.15 per barrel.