Asia-Pacific stocks surged after a rebound on Wall Street and oil hit its highest level in two years as investors reassured by signals the Federal Reserve would continue to support the economic recovery after the coronavirus pandemic .
In the afternoon of Asian trading on Tuesday, the Japanese Topix rose 3.1% and the Australian S & P / ASX 200 climbed 1.8%. India’s benchmark Sensex rose 0.8% to a record high, while China’s CSI 300 index of stocks listed in Shanghai and Shenzhen climbed 0.5%.
The movements followed a rebound for US equities On Monday, the S&P 500 closed 1.4% higher. american stocks tumbled last week after the Federal Reserve switched to a more hawkish tone, raising fears that interest rate hikes could derail the global economic recovery.
But market sentiment was boosted on Monday by more conciliatory comments from Fed officials, including President Jay Powell, who, in remarks prepared ahead of Congressional testimony on Tuesday, said the central bank “will do all it can. to support the economy for as long as it takes. to complete the recovery ”.
John Williams, President of the Federal Reserve Bank of New York, also said that the US economy was not yet ready for the central bank to start withdrawing its significant monetary support.
Jean Boivin, director of the BlackRock Investment Institute, said that “the Fed’s new outlook will not translate into significantly higher key rates any time soon.”
“We could see episodes of market volatility. . . but we recommend staying invested and weathering any turbulence, ”added Boivin.
Futures for the S&P 500 rose 0.2% when trading in Asia on Tuesday, while those on London’s FTSE 100 rose 0.3%.
Commodity prices, which were battered last week over concerns about the global economic outlook, also rose. Brent crude, the international benchmark for oil, edged up 0.3% to $ 75.14 a barrel, breaking the $ 75 mark for the first time since April 2019.
Brent is up over 50 percent this year, highlighting strong demand ahead of next week’s Opec + meeting.
Bitcoin stabilized after falling sharply in response to a Warning of the People’s Bank of China on Monday that state banks and payment platforms nationwide must “investigate and identify” accounts facilitating cryptocurrency trading and block all such transactions.
The cryptocurrency rose 1% to $ 32,881 on Tuesday, but remains down 6.5% this month.
Bond markets stabilized after yields, which move inversely with prices, soared on Monday as investors abandoned public debt safety and plunged back into equities. The 10-year US Treasury yields were flat at 1.492 percent in Asian trade.