Asian investor sentiment is improving.
(Photo: AP)
Tokyo, Shanghai, Shenzhen In Asia, investors shifted their wealth from ailing bonds to stocks, pushing stock markets to a three-week high. The MSCI index of Asia-Pacific stocks outside Japan rose 0.6 percent, with indexes in Hong Kong, Seoul and Sydney posting similar gains. Japan’s Nikkei index jumped 2.5 percent, hitting a two-month high.
Investors withdrew their money from the bond markets because they assumed that the US Federal Reserve would take an even tougher stance in the fight against inflation. The trend, which began months ago, intensified after Fed Chair Jerome Powell hinted at the possibility of larger-than-usual rate hikes. As a result, the interest-rate sensitive yen fell to a six-year low of 121.41 per dollar on Wednesday.
“The rise in yields over the past two weeks has been the largest since the global financial crisis, and even then moves were only a few basis points below what we’re seeing now,” said Jan Nevruzi, rates strategist at NatWest Markets. “At some point, the market could start pricing in an economic downturn, especially if the Fed makes a series of 50 basis point rate hikes,” he warned.
The IT groups Tencent and Alibaba and the food supplier Meituan led the Hang Seng Tech Index with an increase of more than three percent.
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