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GLOBAL MARKETS-Asian equities poised to seesaw as U.S. economic news pushes indexes lower

Stock MarketsMar 25, 2021 07:50
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By Katanga Johnson
WASHINGTON, March 24 (Reuters) - Asian markets will likely
open mixed on Thursday after global equities dipped and U.S.
investors considered which stock market sectors would most
benefit from strengthening growth.
Concerns about extended economic lockdowns in Europe and
potential U.S. tax hikes also weighed on investor sentiment.
"Rising interest rates, uncertainty of tax policy, concern
over inflation all remain top of mind for investors. However,
none of these themes speak to rising appetite for risk," said
Peter Kenny of Kenny's Commentary LLC and Strategic Board
Solutions LLC in Denver.
"We are seeing last year's big gains underperform the
broader market."
European shares closed near two-week lows, while oil prices
resurged from steep losses earlier in the week after one of the
world's largest container ships ran aground in the Suez Canal.
Authorities were still trying to clear the ship from the vital
shipping lane on Wednesday afternoon.
"While the cruise industry is a tiny part of the stock
market ... it's possible that the news was a reminder about the
broader threat that COVID-19 still poses to the entire
re-opening narrative," said Chris Zaccarelli, chief investment
officer at Independent Advisor Alliance in Charlotte, North
"We don't doubt that the economy will reopen substantially
year-over-year and that GDP growth will be impressive, but it is
worth remembering that we need to be wary of the market getting
too far ahead of the facts on the ground."
Australian S&P/ASX 200 futures YAPcm1 lost 0.18% in early
Hong Kong's Hang Seng index futures .HSI HSIc1 lost
Japan's Nikkei 225 futures JNIc1 rose 0.39%.
Emerging market stocks .MSCIEF lost 1.91%. MSCI's broadest
index of Asia-Pacific shares outside Japan .MIAPJ0000PUS
closed 1.86% lower.
On Wall Street, the Dow Jones Industrial Average .DJI fell
3.09 points, or 0.01%, to 32,420.06, giving up early gains even
as investors piled back into economically sensitive sectors on
bets for a continuing U.S. economic recovery, analysts said.
The Nasdaq Composite .IXIC dropped 265.81 points, or
2.01%, to 12,961.89, while the S&P 500 .SPX lost 21.38 points,
or 0.55%, to 3,889.14, unable to halt the prior day's sell-off,
as investors set aside economic optimism by Federal Reserve
Chair Jerome Powell and Treasury Secretary Janet Yellen.
Remarks by the top two U.S. economic officials mirrored what
they told Congress the day before, with Powell saying on
Wednesday the most likely case is 2021 will be "a very, very
strong year." Powell said a round of post-pandemic price increases will
not fuel a destructive breakout of inflation. "For the first time in probably six months there are genuine
questions being raised about the pace and path of the economic
recovery," said IG Markets analyst Kyle Rodda.
"What perhaps had been complacency about the virus and the
prospect of lockdowns has forced the markets to fundamentally
reassess the conversation of risks of economies running too hot,
inflationary pressures and higher yields."
The pan-European STOXX 600 index .STOXX rose 0.02% and
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
Investors have focused on the benchmark 10-year Treasury
note yield, pondering if there is room for long-term interest
rates to run, said David Kelly, chief global strategist at
JPMorgan Asset Management. "We know that the economy is primed to begin to really
accelerate in the second quarter," Kelly said. "But we haven't
seen that acceleration yet so that's what we're waiting for."
Support for most of the session came from data showing U.S.
factory activity picked up in early March on strong growth in
new orders. But supply chain disruptions exerted cost pressures
on manufacturers, keeping inflation fears in focus. U.S. crude CLc1 recently fell 0.72% to $60.74 per barrel
and Brent LCOc1 was at $64.22, up 5.64% on the day.
The dollar index =USD rose 0.196%, with the euro EUR=
unchanged at $1.1812.
Benchmark 10-year notes US10YT=RR last rose 1/32 in price
to yield 1.6102%, versus 1.614% late on Wednesday.
"We'll have to watch and wait naturally to see how this
plays out," added IG's Rodda.

Global assets
Global currencies vs. dollar
Emerging markets
MSCI All Country World Index Market Cap

GLOBAL MARKETS-Asian equities poised to seesaw as U.S. economic news pushes indexes lower

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