Passers-by are reflected on an electric stock listing board outside a brokerage firm in Tokyo, Japan, April 18, 2023. Portal/Issei Kato/File Photo Acquire License Rights
TOKYO, Nov 13 (Portal) – Stocks in Asia rose on Monday while government bonds and the dollar maintained their composure as investors followed Wall Street’s rally on Friday and shrugged off a downgrade of the U.S. credit outlook by Moody’s.
Tech stocks stood out, as they did in the U.S. late last week, after the calming of long-term Treasury yields since the start of this month boosted the outlook for credit-dependent growth stocks.
U.S. 10-year Treasury yields were steady at around 4.646%, consolidating at the top of their range since Nov. 3, when weaker jobs data triggered bets for a less hawkish stance from the Federal Reserve. On November 1st, the yield was as high as 4.935%.
The U.S. dollar index hovered below its peak of 106.01 hit on Friday after the payrolls release, while in recent trading it was little changed at around 105.80.
Japan’s Nikkei (.N225) rose 0.46%, with chip-related stocks providing the biggest boost. Taiwan’s tech-heavy stock benchmark (.TWII) gained 1.17%.
Hong Kong’s Hang Seng (.HSI) gained 0.49% on outperformance of technology stocks (.HSTECH).
However, mainland Chinese blue chips (.CSI300) were slightly lower and Australia’s resource-intensive benchmark (.AXJO) fell 0.13%.
Nomura Securities strategist Naka Matsuzawa said stocks are likely nearing a peak.
“So far the market has taken bad economic news as good news because that would mean a pause in Fed rate hikes,” he said.
“But now the Treasury market has already priced in a pause, so there is not much room for Treasury yields to fall further,” removing support for the stock market, he added. “In short, I don’t think the stock market rally will continue.”
The market paid little attention to Moody’s announcement late Friday that it had cut its U.S. credit rating outlook to negative from stable.
Instead, the focus remains on upcoming economic data, with U.S. consumer price and retail sales readings expected on Tuesday and Wednesday, respectively.
Meanwhile, crude oil prices fell on Monday as demand concerns outpaced supply concerns and growth slowed in the US and China.
January Brent crude futures fell 35 cents, or 0.4%, to $81.08 a barrel, while December West Texas Intermediate (WTI) crude futures were at $76.82, which represents a decrease of 35 cents or 0.5%.
Both benchmarks rose nearly 2% on Friday as Iraq expressed support for OPEC+ oil cuts.
Reporting by Kevin Buckland
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