GLOBAL MARKETS-Asian stocks set to rise as focus shifts to China's PMI, bond yields

By Alwyn Scott
NEW YORK, March 30 (Reuters) - Asian stocks were set to open
higher on Wednesday, as global financial shares retraced some of
their recent losses, driven in part by higher bond yields, and
investors awaited a closely watched Chinese factory activity
survey.
While Wall Street ended lower as yields weighed on tech
shares, financial stocks rose, their gains helped by signs the
fallout from the Archegos meltdown would be relatively
contained. The more upbeat tone expected in Asia also reflected
heightened recovery prospects. China's manufacturing purchasing
managers' index, due for release on Wednesday, was expected to
have ticked higher in March as the world's second-largest
economy continues to reopen. In early Asian trade, Australian S&P/ASX 200 futures
YAPcm1 rose 0.84% while Hong Kong's Hang Seng index futures
.HSI .HSIc1 were up 0.43%. Japan's Nikkei 225 futures NKc1
were down 0.29%.
In the U.S. rising Treasury yields weighed on high-flying
tech-related companies that benefit from low interest rates,
while financials, industrials and consumer discretionary stocks
rose.
Bond prices have been falling on concerns that inflation
might tick up from U.S. stimulus and the economic reopening
allowed by vaccinations. But Ryan Felsman, a senior economist at
CommSec in Sydney, said the inflation picture still seems
benign.
"I'm not convinced by the reflation trade," he said.
The benchmark U.S. 10-year Treasury yield US10YT=RR hit a
14-month high of 1.776% early on Tuesday, but was at about
1.717% by late afternoon in New York. Those factors overshadowed news that the soured bets at New
York-based Archegos Capital Management left banks that financed
its trades nursing at least $6 billion in losses.
While the fund's meltdown is drawing scrutiny from
watchdogs, it was not directly regulated because it manages
former hedge fund manager Bill Hwang's personal wealth as a
single-family office.
The Dow Jones Industrial Average .DJI fell 0.31%, the S&P
500 .SPX lost 0.32% and the Nasdaq Composite .IXIC dropped
0.11%.
The dollar climbed to a one-year high against the yen and
rose against major currencies on the increasing distribution of
U.S. vaccines and President Joe Biden's plans to spend up to $4
trillion on infrastructure. In early Asian trading, the Japanese yen strengthened 0.01%
versus the dollar to 110.33 per dollar.
Brent crude LCOc1 fell 84 cents, or 1.3%, to settle at
$64.14 a barrel while West Texas Intermediate U.S. oil CLc1
ended the session down $1.01, or 1.6%, at $60.55 barrel.
Gold prices slipped nearly 2% on Tuesday.

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