Home Market Asian stocks show some life after bond yields shape up

Asian stocks show some life after bond yields shape up


TOKYO: Asian shares rose on Friday, led by a surge in Chinese equities, on hopes that Washington and Beijing are making progress in trade talks, while global bond yields moved higher after a prolonged slide on worries about the economic outlook.

European shares are expected to rise, with spread-betters tipping Britain's FTSE, France's CAC, Germany's DAX to open 0.4 to 0.5 per cent higher.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.75 per cent while Japan's Nikkei added 0.8 per cent.

The Shanghai Composite Index climbed more than 3.1 per cent.

The mood in the markets was brighter after US officials said China has made proposals in trade talks with the United States on a range of issues that go further than it has before, including on forced technology transfer.

US Treasury Secretary Steven Mnuchin said on Friday he had a "productive working dinner" the previous night in Beijing, kicking off a day of talks aimed at resolving the bitter trade dispute between the world's two largest economies.

Gains on Wall Street also bolstered investor optimism. The S&P 500 on Thursday rose 0.36 per cent and the Nasdaq Composite added 0.34 per cent.

Despite recent turbulence, the S&P 500 has gained 12.3 per cent so far this quarter, which would mark its best quarterly performance since 2009 if sustained.

The 10-year US bond yield edged up to 2.402 per cent from a 15-month low of 2.352 per cent touched on Thursday after an almost relentless fall since the Federal Reserve's dovish tone last week sparked worries about the US economic outlook.

Investors have been on heightened alert since the yield on the 10-year note fell below that of the three-month US Treasury paper last Friday, an inversion of the yield curve that is widely seen as an indicator of a recession.

Data on Thursday showed US economic growth was slower than initially thought in the fourth quarter, with GDP growth revised down to an annualised 2.2 per cent from an earlier reading of 2.6 per cent.

"The economy is softening and will soften for now. But whether the US is entering a recession is still debatable," said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

"Lower bond yields will support the economy while (US President Donald) Trump is likely to take steps to support the economy as he seeks re-election. The economy could pick up later this year," he said.

In the currency market, the euro stood steady at $1.1232 after having slid to a threRead More – Source