HONG KONG, China (AFP) — Equity markets were mixed in Asian trade Tuesday as investors bide their time ahead of the release of key US jobs figures later in the week.
While the Dow and the S&P 500 on Wall Street provided a positive lead, there were few catalysts to drive business, with Tokyo and mainland China’s bourses closed for holidays.
Still, a top US Federal Reserve official provided some welcome comments as he reiterated the bank’s intention to maintain its ultra-loose monetary policy for the foreseeable future even as he predicted the world’s top economy would grow at its quickest pace since the 1980s.
In trying to soothe long-running fears that the expected burst of economic activity this year will fan inflation and force rate hikes, John Williams, president of the Fed’s influential New York branch, said: “It’s important not to overreact to this volatility in prices.”
He added that a sharp rise in inflation was to be expected owing to the low base of comparison last year as the virus shut down the global economy, but that would soon ease.
The latest snapshot of the economy comes Friday with the release of April jobs data, with some observers suggesting around one million positions created.
Analysts said that with highly accommodative policies put in place by the Fed and other central banks to ride out the pandemic likely in place for some time, markets still had some way to go up.
“The world remains almost perfect for equities,” said Chris Iggo at AXA Investment Managers, said.
Despite strong growth, rising earnings and rich valuations, “no one is taking the punch bowl away for now”.
Still, with equities sitting around record or multi-year highs after a more than year-long rally, there is a feeling that they are in store for a small correction soon, before resuming their upward march.
Hong Kong rose a day after data showed the financial hub had finally escaped recession following seven quarters of contraction caused by the pandemic and the 2019 democracy protests.
Sydney, Seoul, Wellington and Jakarta also rose but Singapore, Taipei, Manila and Mumbai were in negative territory.
London rose in early trade as it reopened after a long weekend, while Paris also rose but Frankfurt slipped.
Oil prices edged up, extending Monday’s rally with traders hopeful for a resumption of travel in Europe as leaders look at easing restrictions on foreign tourists as early as next month, if they are fully vaccinated or come from a country with Covid-19 under control.
Along with the rollout of jabs across the continent and in the United States, that was helping offset concerns about the frightening coronavirus surge in India that has crippled the country’s health system and led to calls for strict lockdowns.
Key figures around 0810 GMT
Hong Kong – Hang Seng Index: UP 0.7 percent at 28,557.14 (close)
London – FTSE 100: UP 0.6 percent at 7,012.31
Tokyo – Nikkei 225: Closed for a holiday
Shanghai – Composite: Closed for a holiday
Euro/dollar: DOWN at $1.2017 from $1.2066 at 2100 GMT
Pound/dollar: DOWN at $1.3876 from $1.3907
Euro/pound: DOWN at 86.61 pence from 86.71 pence
Dollar/yen: UP at 109.37 yen from 109.07 yen
West Texas Intermediate: UP 0.3 percent at $64.70 per barrel
Brent North Sea crude: UP 0.3 percent at $67.79 per barrel
New York – Dow: UP 0.7 percent at 34,113.23 (close)
— Bloomberg News contributed to this story —
© Agence France-Presse