Nikkei advances 286 points as Asian stocks extend gains; Powell testimony ahead

Most markets in Asia advanced on Tuesday while the dollar slipped ahead of a congressional testimony from the new Federal Reserve chair during U.S. hours.

Japan’s Nikkei 225 rose 285.75 points, or 1.29 percent, extending a 1.19 percent gain seen in the last trading session. The technology, financials and manufacturing sectors traded in positive territory.

Among index heavyweights, SoftBank Group advanced 0.76 percent, Fanuc Manufacturing gained 2.15 percent and Fast Retailing added 1.32 percent. Automakers also traded higher, with Honda Motor climbing 2.23 percent.

Across the Korean Strait, the Kospi tacked on 0.34 percent, with gains seen in automakers, financials and financials early in the session.

Heavily weighted technology stocks traded in positive territory after tech names stateside put in a strong showing in the last session. Samsung Electronics jumped 1.1 percent and SK Hynix advanced 1.68 percent.

In Sydney, the S&P/ASX 200 edged up 0.3 percent, with the financials and materials sub-indexes contributing to gains on the broader index.

Australia’s “Big Four” banks were in the green, with National Australia Bank tacking on 0.73 percent and ANZ higher by 0.83 percent. Mining majors Rio Tinto and BHP were up 1.19 percent and 0.91 percent, respectively. Hong Kong’s Hang Seng Index advanced 0.14 percent, with the financials sector holding onto slight gains in the afternoon despite most names trading lower: China Construction Bank slipped 0.47 percent and HSBC lost 0.88 percent.

Insurer AIA Group announced that the value of new business for the period ending November 30 rose 28 percent to $3.51 billion. The metric measures expected profit from new premiums. AIA shares rose 4.75 percent, contributing the most to the benchmark’s overall 46-point gains.

Mainland markets, however, slipped on Tuesday after recording sharp gains in the last session. On Tuesday, the Shanghai composite declined 0.91 percent while the Shenzhen composite shed 0.21 percent.

Mainland China markets had shone in the previous session as investors digested weekend news about the proposal to remove a two-term limit on the presidency. The Shanghai composite climbed 1.25 percent and the start-up board Chinext index popped 3.12 percent on Monday.

Stateside, Wall Street got off to a strong start on the first trading day of the week, with major stock indexes rising more than 1 percent as U.S. bond yields slipped.

The Dow Jones industrial average gained 399.28 points, or 1.58 percent, to close at 25,709.27, and the S&P 500 and Nasdaq composite advanced around 1.2 percent.

U.S. Treasury yields traded sideways ahead of Federal Reserve Chair Jerome Powell’s testimony before Congress on Tuesday during U.S. hours. Markets are watching for clues on the central bank’s rate hike path and Powell’s views on inflation.

“[T]he more likely outcome for Powell may be a speech and answers that differ insubstantially from the language used by his predecessor, Janet Yellen. He has more to lose today than he has to gain,” said Robert Carnell, chief economist and head of research at ING, in a note.

The yield on the benchmark 10-year Treasury note was mostly steady at 2.866 percent during Asian trade after slipping in the last session.

“Back then, a spike in U.S. Treasury yields was the trigger for the rout in U.S. equities and now the decline in U.S. Treasury yields appears to be the main driver for the equity rebound,” said Rodrigo Catril, senior FX strategist at National Australia Bank, in a morning note.

In currencies, the dollar index, which tracks the greenback against a basket of currencies, stood at 89.830 at 12:42 p.m. HK/SIN, below Monday’s close of 89.874.

Despite the decline seen on Tuesday, the dollar index has still firmed around 0.8 percent since the beginning of February.

Against the yen, the dollar was mostly stable at at 106.95.

Meanwhile, the won traded at 1,072.70 to the dollar. The currency had earlier traded as high as 1,067.80 won to the dollar after the Bank of Korea announced Tuesday that it would hold interest rates steady at 1.5 percent.

On the commodities front, oil prices were softer after touching their highest levels in about three weeks in the last session. On Tuesday, U.S. West Texas Intermediate edged down 0.23 percent to trade at $63.76 per barrel. Brent crude futures were off by 0.18 percent at $67.38.

Source: CNBC

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