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Published: 13:08, January 20, 2022
Asian share markets break a five-day slide to edge higher
By Reuters
Published:13:08, January 20, 2022 By Reuters

SHANGHAI - Asian share markets broke a five-day slide to edge higher on Thursday, shrugging off drops in Europe and on Wall Street overnight. 

Expectations that the US Federal Reserve will move more quickly to hike interest rates to combat inflation hit technology shares particularly hard overnight, pushing the Nasdaq down more than 1 percent into correction territory.

The sell-off hit bonds as well, pushing US Treasury yields to two-year highs on Wednesday, and taking Germany's 10-year yield into positive territory for the first time since May 2019 as investors bet policymakers will curb years of stimulus in order to fight rising inflation exacerbated by supply chain disruption.

"There comes a point when you've offloaded, you might want to stop offloading. If bonds start to rally a little bit, and you saw yields ease off yesterday in the US, it kind of feels like ... we might actually not get a follow-through today," said Matt Simpson, senior market analyst at City Index in Sydney.

The modest gains in Asia came after investors on Wall Street looked past robust earnings at the outlook for inflation and rate rises.

The Dow Jones Industrial Average fell 0.96 percent and the S&P 500 lost 0.97 percent. The Nasdaq Composite dropped 1.15 percent, putting it more than 10 percent below its Nov 19 record closing high to confirm a correction.

In the Asian session, US yields edged up, but remained below their highs in the previous session. The benchmark 10-year yield rose to 1.8485 percent from a US close of 1.827 percent, and the policy-sensitive two-year yield touched 1.0449 percent compared with a US close of 1.025 percent.

The pause in Treasury yields' march higher kept the dollar in check, with the dollar index which measures the greenback against six major peers at edging down to 95.477 as commodity currencies benefited from high oil prices.

The Aussie dollar was 0.4 percent higher.

The dollar slipped 0.08 percent against the Japanese yen to 114.23 and the euro rose 0.15 percent to $1.1356.

Oil prices, which had touched their highest levels since 2014 on Wednesday on strong demand and short-term supply disruptions, fell back. Global benchmark Brent crude was 0.84 percent lower at $87.70 per barrel and US crude dropped 1.1 percent to $86 per barrel.

Gold continued to crawl higher after marking its best session in three months a day earlier. Spot gold rose 0.08 percent to $1,841.12 an ounce.


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