Asian stocks open higher as Fed’s Powell nixes inflation fears

26-Feb-2021 Intellasia | Reuters | 7:31 AM Print This Post

Asian stocks perked up today after US Federal Reserve Chair Jerome Powell reaffirmed interest rates would stay low, calming market fears that higher inflation might prompt the central bank to tighten the monetary spigot.

“The dovish influence from the Fed is going to continue to resonate over in Asia. That’s really good for emerging market assets when we’ve got a really good impulse from the Fed,” said Stephen Innes, chief global markets strategist at Axi.

Australia’s S&P/ASX 200 rose 0.90 per cent in early trade while Japan’s Nikkei 225 added 1.37 per cent. Hong Kong’s Hang Seng index futures rose 0.92 per cent.

In a second day of testimony in Washington, Powell reiterated the Fed’s promise to get the US economy back to full employment and to not worry about inflation unless prices rose in a persistent and troubling way.

Crude oil climbed to fresh 13-month highs after US government data showed a drop in crude output as a deep freeze disrupted production last week.

Gold prices struggled for traction as elevated Treasury yields eroded the allure of bullion as an inflation hedge.

The dollar hit fresh three-year lows against the pound and commodity-linked currencies including the Canadian, Australian and New Zealand dollars, which are expected to benefit from a pick-up in global trade as growth rebounds.

MSCI’s gauge of stocks across the globe gained 0.12 per cent, as rising stocks on Wall Street pushed the global benchmark to reverse early losses.

The Dow Jones Industrial Average set a record high rising 1.35 per cent to 31,961.86 while the S&P 500 gained 1.14 per cent. The Nasdaq index, which fell as much as 1.3 per cent earlier in the session, regained its footing by early afternoon and closed up 0.99 per cent.

Shares of GameStop Corp, at the centre of a volatile retail trading frenzy moves in late January, more than doubled in price in late trading and continued to soar in heavy, post-market trade.

The US Food and Drug Administration said yesterday Johnson & Johnson’s one-dose Covid-19 vaccine appeared safe and effective in trials, paving the way for its approval for emergency use as soon as this week.

Johnson & Johnson rose 1.3 per cent following the news, seen as another boost to a strong recovery.

The dollar index fell 0.083 per cent, with the euro up 0.02 per cent to $1.2167 (RM4.93). The Japanese yen weakened 0.03 per cent versus the greenback at 105.91 per dollar.

Oil prices rose after US government data showed a drop in crude output as a deep freeze disrupted production last week.

US crude recently rose 0.3 per cent to $63.41 per barrel and Brent was at $67.31, up 2.97 per cent on the day.

Spot gold dropped 0.1 per cent to $1,802.72 an ounce. US gold futures gained 0.30 per cent to $1,802.00 an ounce.

https://www.malaymail.com/news/money/2021/02/25/asian-stocks-open-higher-as-feds-powell-nixes-inflation-fears/1952695

 

Category: FinanceAsia

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