Asia on the rise as investors overlook US hedge fund default

HONG KONG (Reuters) – Asian stock markets strengthened on Tuesday as investors remained focused on the global immunization program and allayed concerns about a hedge fund failure that hit international bank stocks overnight.

European stocks are expected to open higher with Euro Stoxx futures up 0.35% and UK FTSE futures up 0.33%.

Asian investor sentiment was mixed at first but turned positive later in the session with most of the region’s major markets trading higher.

Asia-Pacific’s largest MSCI index outside of Japan rose 0.6%, while mainland China’s CSI300 index rose 1%.

Hong Kong’s Hang Seng Index rose 1.2% to hit 28,668, due to a rebound in the city’s technology stock index, which has come under pressure from concerns over the Chinese government’s decision to ” increase the regulation of these companies.

Japan’s Nikkei remained stable, dragged down by the weakness in the Nomura share price, while Australia rang a weaker tone as the S & P / ASX200 closed down 0.9% to its point the lowest for a week.

Jack Siu, Credit Suisse’s senior investment strategist for Asia-Pacific, said the prospect of travel bubbles establishing in Asia has sparked excitement among some investors in the region.

“Asian economies dependent on tourism will benefit,” he said.

Hong Kong Commerce Secretary Edward Yau reported on Monday that the government had resumed talks with Singapore to reestablish a potential travel bubble between cities.

Investor sentiment has always been closely tied to the pace of the global vaccine rollout, said Elizabeth Tian, ​​director of equity derivative solutions at Citigroup.

Investors will also watch the number of COVID cases as it spikes in Western Europe and the Philippines sees the return of new restrictions, as vaccination attempts threaten to stagnate amid supply constraints and vaccine nationalism Tian said.

“As restrictions are tightened in Europe, the UK will ease stay-at-home rules,” she added.

Nomura and Credit Suisse face billions of dollars in losses and regulatory oversight after a U.S. investment firm, named by sources as Archegos Capital, defaults on equity derivative bets, putting investors on the line. difficulty over who else might be exposed.

Nomura’s shares fell another 1.1% on Tuesday after falling 16% on Monday when it revealed it could suffer a $ 2 billion loss from the hedge fund fallout.

“I don’t think the matter of Archos Capital is over yet, it will always be a problem in the future,” said Kingston Securities Executive Director Dickie Wong. “The shares have been discontinued, but some investors believe family offices may face more stringent regulation in the future.”

Wall Street slashed early losses in the banking sector, fearing that the problems associated with the fall of Archegos could spread throughout the banking sector.

The Dow Jones Industrial Average rose 0.3%, the S&P 500 lost 0.09% and the Nasdaq Composite fell 0.6%.

Benchmark 10-year yields reached 1.7456%, up 2.9 basis points, after earlier trading slightly higher in the United States after New York State announced on Monday that seniors aged 30 and over could be vaccinated against the coronavirus from March 30.

Five-year Treasuries rose 2.4bp to a one-year high of 0.915% in the Asian session.

Oil prices rose as the market focused on an OPEC + meeting this week, where extending supply restrictions could be on the table amid new coronavirus pandemic lockdowns.