(Bloomberg) — Most Asian stocks rose Tuesday after another all-time high for U.S. shares on optimism that the global recovery can weather risks from the coronavirus and tightening monetary policy.
Equities climbed in Japan but dipped in South Korea, while U.S. futures inched lower. The S&P 500 posted its 69th record close this year, though volumes were lower than average. Hong Kong will reopen after a holiday and Australia remains shut.
A U.S. index of Chinese stocks slipped, taking its 2021 losses past 44% amid Beijing’s regulatory crackdown. The latest steps are new curbs on offshore listings by firms in sectors off-limits to foreign investment, a move that could plug a loophole long used by the tech industry to raise capital overseas.
Shorter maturity Treasury yields advanced, while those for longer-dated bonds were steady. The dollar was little changed. Crude oil held a rally amid wagers that global economic reopening faces only a temporary setback from the outbreak of the omicron virus strain.
Global shares are on course for a third year of double-digit returns, powered by the U.S. surge. The climb has overcome coronavirus waves and a shift by some key central banks toward tighter monetary policy to fight high inflation. Concerns remain that those variables could lead to a pick up in volatility.
“The remedies that we put in place to counter the Covid recessions, they were so substantial, we had massive stimulus,” Sandip Bhagat, chief investment officer of Whittier Trust, said on Bloomberg Television. “We’ll be left with a legacy of those policy responses well into the future” and stocks can continue advancing, he said.
Traders were also evaluating the latest comments from China’s central bank. It reiterated that the yuan exchange rate will be more flexible in 2022 and will stay basically stable at a reasonable and balanced level. The People’s Bank of China also said it will ensure the overall size of credit keeps growing in 2022.
Meanwhile, China Evergrande Group faces an initial interest payment deadline for two dollar bonds Tuesday, in the property giant’s first major test of investor confidence after it was officially labeled a debt defaulter.
What to watch this week:
- U.S. initial jobless claims, Thursday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.1% as of 9:20 a.m. in Tokyo. The S&P 500 rose 1.4%
- Nasdaq 100 futures dipped 0.1%. The Nasdaq 100 rose 1.6%
- Japan’s Topix index climbed 1%
- South Korea’s Kospi index shed 0.3%
Currencies
- The Bloomberg Dollar Spot Index was steady
- The euro was at $1.1328
- The Japanese yen was at 114.81 per dollar
- The offshore yuan was at 6.3740 per dollar
Bonds
- The yield on 10-year Treasuries held at 1.48%
Commodities
- West Texas Intermediate crude rose 0.2% to $75.71 a barrel
- Gold was at $1,811.35 an ounce
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