Asian stocks extend global gains
Hong Kong — Asian shares followed Wall Street higher in early trade on Tuesday as the passage of a US infrastructure bill boosted sentiment while oil prices gained on the outlook for energy demand in an expansive global economy.
The congressional passage of a long-delayed US $1-trillion infrastructure bill over the weekend has cheered investors, who however face another test later in the week from a reading on US inflation that may influence plans for tightening monetary policy.
Early in the Asian trading day, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3%. Japan’s Nikkei stock index rose 0.06%, while Australian shares were down 0.12%. China’s blue-chip CSI300 index was 0.33% higher in early trade. Hong Kong’s Hang Seng index opened up 0.65%.
On Monday, Wall Street’s benchmark S&P 500 index and the Nasdaq extended their run of closing highs to eight straight sessions, while the blue-chip Dow notched its second consecutive record closing high.
A 4.9% decline in Tesla shares however weighed on the S&P 500. Tesla fell after CEO Elon Musk’s Twitter poll on whether he should sell about 10% of his stock in the electric carmaker. The poll garnered more than 3.5-million votes, with 57.9% voting “yes”.
World shares also rose on Monday after hitting a high last week as dovish central bank messages and strong US labour data on Friday added to optimism generated by a healthy earnings season on both sides of the Atlantic.
But a tight US labour market and the dislocation in global supply chains could result in a high reading for consumer prices on Wednesday. Strong inflation likely would rekindle talk of Federal Reserve raising interest rates earlier than expected.
“Although Fed chair Powell maintains the Fed can be patient with regards to rate hikes, with measures of underlying inflation and wages intensifying and broadening, the clock is ticking on how long the it can hold that line,” ANZ analysts said in a note.
Traders also sent most US Treasury yields higher on Monday after Congress passed the infrastructure bill on Saturday.
The yield on benchmark 10-year Treasury notes touched 1.4862% compared with its US close of 1.497% on Monday.
The dollar index, which tracks the greenback against a basket of six currencies, was up at 94.075.
Oil prices firmed as the passage of the US infrastructure bill and China’s export growth supported the outlook for energy demand. Saudi Arabia’s state-owned producer Aramco also raised the official selling price for its crude.
US crude ticked up 0.15% to $82.05 a barrel. Brent crude rose to $83.59 a barrel.
Spot gold was slightly lower, trading at $1,823.3 an ounce.
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