Reuters | Feb 24, 2021 09:10
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Echo Wang
MIAMI, Feb 23 (Reuters) - Asian equities opened lower on
Wednesday on concerns about rising interest rates and rich
equity valuations and following a downdraft in U.S. and European
The Dow .DJI and S&P 500 .SPX recouped early losses
after Federal Reserve Chair Jerome Powell reiterated in
testimony before the Senate Banking Committee that monetary
policy would remain accommodative and would not change without
advance warning. The tech-heavy Nasdaq .IXIC index closed down 0.5% as
investors sold the big tech stocks that have driven the market
rally since last March, and rotated into cyclicals, helping lift
the Dow and S&P 500.
But Powell's testimony hasn't fully swept away fears of
rising inflation as the economies around the world are expected
to rebound this year more strongly than was expected just weeks
go as vaccines roll out around the world.
"Despite reassuring words from Mr Powell markets know that
if the U.S. inflation ... hits over 2%, then the Fed will have
difficulty in maintaining its support for economies and
markets", said Michael McCarthy, Chief Markets Strategist at CMC
Markets in Sydney.
In early Asia trade, Australia's S&P/ASX 200 .AXJO was
down 0.5%, South Korea's KOSPI .KS11 shed 0.4% while Japan's
Nikkei 225 .N225 was down 0.9%. Hong Kong's Hang Seng index
futures .HSI .HSIc1 were down 0.37%.
U.S. tech stocks fell as investors sold recent winners to
rotate into assets that are expected to do well in an improving
economy. The tech-heavy Nasdaq .IXIC dropped 0.5% while in
Europe tech stocks .SX8P posted their worst two-day decline in
four months, falling 3.7%.
Tesla Inc TSLA.O lost 2.2% to close in negative territory
for the year, pulled down amid the tech selloff and falling
bitcoin BTC=BTSP , which lost 12%. Tesla recently invested $1.5
billion in the cryptocurrency.
The Dow Jones Industrial Average .DJI rose 15.66 points,
or 0.05%, to 31,537.35, the S&P 500 .SPX gained 4.87 points,
or 0.13%, to 3,881.37.
Spot gold XAU= added 0.1% to $1,806.25 an ounce.
The dollar index =USD fell 0.037%, with the euro EUR= up
0.04% to $1.2154.
U.S. crude CLc1 settled down 3 cents to $61.67 a barrel on
Tuesday, still close to its highest levels since January 2020.
Brent crude LCOc1 settled up 13 cents, or 0.2%, to $65.37 a
The 10-year U.S. Treasury note US10YT=RR was down 1.4
basis point at 1.3551% in late U.S. trade. It touched a high of
1.389% early Tuesday before Powell's testimony.
The two-year US2YT=RR U.S. Treasury yield, which typically
moves in step with interest rate expectations, was little
changed at 0.1169%.
Written By: Reuters
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