Asian stocks slipped on Friday as US bond yields eased pressure on high-tech companies.
Tokyo Nikkei 225 index fell 2% և shares fell in most other markets.
Investors were disappointed by Federal Reserve Chairman ome Jerome Powell on Thursday, when he said inflation was likely to rise in the coming months, although he warned that growth would be temporary and would not be enough for the Fed to change its interest rate policy. has begun to rebuild the economy from the epidemic.
Powell did not say whether the Fed might try to curb the rising yields on bonds that tend to outperform less risky bonds.
Investors were hoping Powell would “hold his hand a little more,” said Axis Inns of Axi. “Powell is doing the least here, but at the same time hinting at a rise that could have been much closer to the horizon than was suspected just a few weeks ago.”
That anger has spilled over into world markets, which have been boosted by massive monetary stimulus from the world’s central banks. But most Asian markets recovered some of their losses at the end of the day.
Japan’s Nikkei 225 lost 0.2% to 28,864.32, while Hong Kong-based Hang Seng fell 0.1% to 29,211.63. South Korea’s Cospin fell 0.6% to 3,026.26 and the S & P / ASX 200 sank 0.7% to 6,710.80.
The Shanghai Composite Index fell below 0.1% to 3,501.99 points after Chinese Premier Li Keqiang announced an annual growth target of “more than 6%” at the opening of the annual session of the solemn national legislature. Investors are reluctant to take any policy changes by the National People’s Congress, in particular to curb government spending or tighten monetary policy, which could affect markets.
The S&P 500 fell 1.3% to 3,768.47 on Thursday, its third straight loss. It fell into the red in a short time during the year, its third consecutive weekly loss.
Just four days ago, the benchmark recorded its biggest gain since June, following a brief hiatus from the recent rapid growth in bond yields, which in turn raises interest rates on consumer loans to businesses.
Dow Jones Industrial Average lost 1.1% to 30,924.14. The Nasdaq Composite fell 2.1% to 12,723.47 as a result of feedback, which pushed the technologically heavy index into the red for the year.
Shares of small businesses fell even more. The Russell 2000 Small Business Index fell 2.8% to 2,146.92.
As the economy reopens this spring և summer և vaccines are being distributed, ոն the coronavirus is receding, many economists are expecting a cost boom that will boost goods մատչելի available supplies of services ան is likely to drive up prices.
Even then, Powell did not hint that the Fed would take steps to curb long-term interest rates, such as shifting some of its $ 80 billion in treasury purchases to longer-term securities.
“We think our current political position is appropriate,” he said.
According to Powell, the yield on the 10-year treasury bill jumped to 1.54% from 1.47% in the previous year, which was a significant step. At the beginning of the year, the yield was selling at 0.93%. It reached 1.56% tomorrow, Friday.
Investors tend to revalue their assets when yields grow rapidly. Technology resources are more vulnerable after an increase in the epidemic, making them look more expensive than the rest of the market. Unlike bank stocks, it is better to deal when bond yields increase, as higher yields mean that banks may charge higher interest rates on mortgages and other loans.
At the New York Mercantile Exchange, the price of US crude oil rose by 98 cents to $ 64.81 per barrel. It jumped 4.2% on Thursday after OPEC members agreed to abandon existing cuts in their oil production. Brent crude rose $ 1.14 to $ 67.88 a barrel.
The Senate is moving to pass President Biden’s stimulus bill as most of the negotiations now go through the more moderate Senate Democrats in the White House.
Investors are waiting for the February job report on Friday. Economists surveyed by FactSet expect employers to create 225,000 jobs last month. The report also contains figures on how much wages are rising in the economy, a key component of inflation.
The US dollar rose to 108.26 Japanese yen, the highest level in nine months, from 107.97 yen late on Thursday. The euro fell from $ 1.1969 to $ 1.1954.