HONG KONG- Asian shares advanced on Wednesday with tech stocks particularly catching a lift following a strong session on Wall Street, while US treasury yields held near multi-year highs ahead of closely watched inflation data this week.
Investors across asset classes are devoting considerable thought to the pace and timing of interest rate hikes by central banks across the world.
Barring any big surprises, the consumer price index should cement expectations the US Federal Reserve will raise interest rates next month, with a strong print offering further support to those tipping a larger 50 basis point rise.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 1 percent to its highest in two weeks, helped by a 3 percent gain in Hong Kong-listed tech stocks.
Japan’s Nikkei gained 0.9 percent.
All three main Wall Street indexes closed higher with tech stocks including Apple Inc and Microsoft Corp jumping, as did bank stocks supported by the prospect of higher US interest rates.
Nonetheless, the Nasdaq Composite is still down 9.2 percent this year after a brutal January.
ManishiRaychaudhuri, Asia-Pacific equity strategist at BNP Paribas, said market volatility was lingering as investors tried to figure out how often, how far and how fast central banks would raise interest rates.
“The overarching theme for the market is central banks’ monetary policies,” he said. “I think volatilities will continue and will possibly increase…but over the longer term corporate balance sheets, particularly in Asian emerging markets look a lot better than they were earlier,” he said.
Elsewhere in Asia Pacific, gains in tech names helped Korea’s KOSPI rise 0.8 percent and Commonwealth Bank of Australia, the country’s largest bank gained 5 percent after announcing a A$2 billion share buyback. – Reuters
