TOKYO (Reuters) – Asian stocks rose on Tuesday, following Wall Street’s advance to record highs as investors anticipated that the US Federal Reserve and other central banks meeting this week will maintain accommodative policies to help drive a post-pandemic global economic recovery.
European equities appeared poised to extend the global rally, with Euro Stoxx 50 futures across the region rising 0.2% and FTSE futures a further 0.5% in early trading. On Monday, the STOXX 600 index hit its highest level in more than a year before ending flat. E-mini futures for the S&P 500 were up 0.04%.
An index of Asia Pacific equity markets excluding Japan strengthened 0.69%, led by a 1.2% jump in Australia’s benchmark S & P / ASX 200 index.
Japan’s Nikkei 225 gained 0.5% to just below the 30,000 mark, while the broader Topix added 0.65%.
China’s top-line CSI 300 Index rose 0.55% and Hong Kong’s Hang Seng gained 0.46%.
“The rally in equities has to do with expectations that, as we heard from central banks this week, they will reiterate a message that they have already made clear, which is that they are not concerned about the inflation outlook,” said Michael McCarthy, chief executive officer. Market Strategist at CMC Markets in Sydney.
“Whether that will last or not is a key question. We have seen sentiment revert sharply several times over the past two to three weeks, particularly in the bond markets. But for now, the sun is shining and capital gains reflect that. “
On Monday, the S&P 500 and the Dow Jones Industrial Average spiked thanks to gains in travel stocks, as mass vaccines in the United States and the passage of a 1.9 aid bill by Congress. trillions of dollars fueled investor optimism.
Longer-term US Treasury yields fell further on Tuesday as the market looked to government debt auctions and the Fed’s two-day policy meeting, which is set to wrap up on Wednesday.
The 10-year benchmark yield, which hit a more than a year high of 1.642% last week, was back at 1.125%.
The previous increase in yields was due to investors speculating that rising inflation expectations could lead the Federal Open Market Committee to signal that it will start raising rates earlier than expected.
The Fed’s policy makers are expected to forecast that the US economy will grow in 2021 at the fastest rate in decades, as it recovers from a coronavirus-ravaged 2020.
The Bank of England also meets this week on Thursday, while the Bank of Japan concludes a two-day meeting on Friday.
On Wall Street, the Dow Jones Industrial Average rose 174.82 points, or 0.53%, to 32,953.46, the S&P 500 gained 25.6 points, or 0.65%, to 3,968.94 and the Nasdaq Composite fell. kept unchanged at 0.00.
Airline stocks rose as companies signaled concrete signs of an industry recovery as vaccine launches help boost leisure bookings.
Prospects for a post-pandemic recovery continued to diverge between the United States and Europe.
President Joe Biden’s order to make the vaccine available to all adults by May 1 is in contrast to stuttering launches in Germany, France and elsewhere, where use of the AstraZeneca vaccine has been suspended due to concerns about possible serious side effects.
However, Kyle Rodda, an analyst at IG Markets, said the prospect of a slower economic recovery in Europe did not appear to be a major hurdle for investors.
“It doesn’t seem to be the view that this is a real risk,” he said. “Investors are cautious, but they are not worried.”
In currencies, the US dollar held small gains overnight, with apparent caution ahead of central bank meetings.
The dollar was mostly flat at 109.19 yen, after rising to 109.365 on Monday for the first time since June.
The euro was little changed at $ 1.1930, languishing for an eighth session below the closely watched $ 1.20 level.
Bitcoin continued its decline from an all-time high of $ 61,781.83 reached on Saturday, the latest trade was 2.42% weaker on the day at around $ 54,304.
April US West Texas Intermediate crude changed hands at $ 64.81 a barrel, 58 cents less. May Brent crude futures were at $ 68.31 a barrel, losing 57 cents.
Reporting by Kevin Buckland in Tokyo and Kane Wu in Hong Kong; Editing by Cynthia Osterman, Jacqueline Wong and Simon Cameron-Moore