Global markets: Asian shares rise as technicians raise Wall Street, Italy remains a concern

TOKYO (Reuters) – Asian stocks rose on Wednesday after the strength of the technology sector boosted Wall Street shares as concerns over Italy's debt led investors to switch to lower-risk government debt other places, pushing the US Treasury yields UU

A man pbades in front of an electronic plaque that shows Japan's Nikkei average outside of a brokerage in Tokyo, Japan, February 9, 2018. REUTERS / Toru Hanai

The broadest MSCI index of Asian stocks and The Pacific outside of Japan increased 0.5 percent, as did Japan's Nikkei.

A stronger than expected first-quarter growth sent Australian stocks up by 0.4 percent.

The Nasdaq closed a record for the second consecutive day on Tuesday with the help of technology and consumer discretionary sectors, aided by optimistic outlooks for the US economy. UU

But the S & P 500 fell, with the financial sector affected by lower Treasury yields, which may reduce the banks' profits.

Yields on Treasuries fell as investors returned to secure public debt after the new Italian Prime Minister, Giuseppe Conte, promised to enact economic policies that could increase the already heavy debt burden from the country.

On the other hand, concerns about the debt caused yields on Italian government bonds to rise again after they had declined to week-long lows on Monday.

"The Italian political situation will remain uncertain, and considering its potential impact on European Central Bank policy, market volatility may remain relatively high," said Yoshinori Shigemi, global markets strategist at JPMorgan Asset Management.

The response of the foreign exchange market to the comments of the new Italian prime minister was more positive, with the euro winning after Conte said that the government had no plans to leave the euro zone.

The euro was slightly higher at $ 1.1725 after gaining around 0.2 percent overnight. The currency had fallen to a 10-month low of $ 1.1510 on May 29 due to concerns about Italy leaving the euro zone.

Persistent concerns about tit-for-hit tariffs and the risk of further global trade war remained in the background, weighing on investor sentiment.

In recent events, Mexico imposed tariffs on a range of US products, retaliating for the decision of US President Donald Trump last week to eliminate an exemption on steel and aluminum for allies Mexico, Canada and the European Union.

Trump's economic adviser, Larry Kudlow, also revived the possibility that the president seeks to replace NAFTA with bilateral agreements with Canada and Mexico.

The threat of growing trade protectionism has already affected world trade and could increase risks to growth, badysts ANZ Daniel Been and Giulia Lavinia Specchia said in a note.

"In this context, we believe that financial markets will be even more sensitive to bad news," they wrote, while recommending a defensive stance on risk taking.

The dollar index against a basket of six major currencies remained almost unchanged at 93.81.

Currency of the United States UU It experienced few changes to 109,850 yen after having been displaced from a maximum of almost two weeks above the 110.00 scaled the previous day, as the US yields. UU They fell during the night.

The Australian dollar was just off the highs of $ 0.7665. Won a quarter of a penny from the US After the data showed that Australia's economy grew by 1.0 percent in the first three months of this year from the previous quarter, surpbading market expectations.

The yield on the 10-year Treasury note was at 2.9269 percent, after having retreated from a 10-day high of 2,946 percent on Monday.

In commodities, Brent crude futures were up 26 cents at $ 75.63 a barrel. The contract was as low as $ 73.81, the weakest since May 8, the day before after a report that the US government had asked Saudi Arabia and other major exporters to increase oil production.

Additional reporting by Vidya Ranganathan; Edition of Kim Coghill and Richard Borsuk


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