TOKYO- A tech-fuelled global stocks rally cooled in Asian trade on Thursday as investors took a more cautious posture amid uncertainties around the outlook for inflation and interest rates.
World bond yields, however, continued to ease from multi-year highs and the dollar trod water ahead of the closely watched US inflation report due later in the day that should offer new clues on the pace of US interest rate hikes.
Crude oil resumed its uptrend as a big drawdown in US inventories underscored the ongoing tightness in the market.
Japan’s blue-chip Nikkei started the day almost 1 percent higher before beginning a steady slide that took it close to negative territory. It later rebounded to be 0.33 percent higher.
Meanwhile, Chinese blue chips sank 0.52 percent and Hong Kong’s Hang Seng retreated 0.31 percent.
MSCI’s broadest index of Asia-Pacific shares eked a 0.10 percent gain.
“We don’t know how many US rate hikes there are going to be this year, and I don’t think the Fed knows either, and that’s getting markets a little bit nervous, to say the least,” said Kyle Rodda, a market analyst at IG Australia.
“Any kind of data surprise is going to inflame that nervousness, and that’s leading to the choppiness that we’re seeing in markets.”
On Wednesday, Big Tech led Wall Street higher, with the Nasdaq surging 2.1 percent and the S&P 500 ending 1.45 percent higher.
US futures pointed lower though, indicating a 0.28 percent retreat for the Nasdaq and a 0.23 percent decline for the S&P.
Helping sentiment overnight was a fall in long-term bond yields. The 10-year US Treasury yield slipped back to 1.9285 percent in Tokyo on Thursday from a near 2-1/2-year peak on Tuesday. Its German counterpart retreated from a three-year high.
“It was a more positive session for global bonds, with European bond yields taking a breather from their seemingly relentless recent rise,” Damien McColough, head of rates strategy at Westpac, wrote in a client note. – Reuters
