Stocks hold gains on easing Fed worries as Powell speech expected By Reuters

By Alun John

HONG KONG (Reuters) – Asian stocks held onto their recent gains on Wednesday following last week’s punches, as global stocks rebounded on a combination of positive COVID-19 vaccine news and appeasement concerns about waning Federal Reserve stimulus.

The largest MSCI index of Asia-Pacific stocks outside of Japan was down slightly, but still up 3.7% so far this week. The index fell to its lowest in 2021 at the end of the previous week.

Markets were mixed, with Australian stocks gaining 0.16%, but Chinese blue chips losing 0.24%.

were flat. A Reuters poll of analysts and fund managers showed Japanese stocks are expected to recover from their eight-month low on Friday to near a 30-year high by the end of this year.

Asia has been anchored by overnight gains in all three major US stock indices, with the Nasdaq and the close at all-time closing highs with the S&P 500’s 50th record closing this year. ()

Investors continue to worry about spikes in COVID-19 infections caused by the highly contagious Delta variant, but the United States Food and Drug Administration on Monday granted full approval for the COVID-19 vaccine developed by Pfizer Inc (NYSE :), giving hope that inoculations could accelerate.

Hong Kong’s benchmark index jumped nearly 1% at the opening, but lost 0.5% for the last time, after posting its best day of the month the day before as the market moved away from the end of last week of its lowest close for this year.

The TECH index rose shortly after the bell, gaining more than 3%, building on this week’s strong gains as investors crammed into oversold stocks, but then ditched those gains for themselves. exchange flat.

“It has been pretty obvious to return to neutrality, especially on stocks that have been oversold,” said Rob Munford, Hong Kong-based investment manager at GAM Investments.

“How it progresses from here, I don’t think it’s as much about China and Asia as it is what the US is doing. If it’s a benign scenario from Jackson Hole, I think you will definitely see China coming back, ”he said.

On Friday, the Federal Reserve will hold its annual economic symposium, traditionally held in Jackson Hole, although this year it will take place virtually due to the spread of COVID-19 in the county.

The focus remains squarely on remarks by Fed Chairman Jerome Powell at the event for any clues regarding the timing of the Fed’s reduction in asset purchases, an issue that has rocked financial markets in recent times. month.

The benchmark return hit 1.3019%, its highest since August 13.

Improving risk sentiment kept the dollar under pressure, leaving it near a one-week low against its major peers on Wednesday. Commodity currencies like the Australian and New Zealand dollars made solid gains this week.

“If Powell talks about the political outlook and more specifically, hints at the timing and / or pace of the cut, the dollar could, in our view, get a boost,” CBA analysts wrote in a statement. note.

“Until then, the USD will remain guided by the general mood of the market.”

fell 0.25% to $ 67.37 a barrel, while it fell 0.38% to $ 70.92 a barrel – both are however up around 8% on the week, after posting their biggest weekly drop in over nine months last week. [O/R]

Safe haven gold fell alongside the general increase in risk appetite, with the spot price falling 0.4% to $ 1,796.03 an ounce. [GOL/]