Equity markets: Tokyo, Shanghai rebound

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Tokyo, Hong Kong, and Shanghai equity markets led a strong advance across the Asian region as a semblance of stability returned after last week’s turmoil taking a cue from strong gains in Europe and US.

However, Investors remain nervous ahead of the release of key US inflation data which many fear could spark another round of blood-charter.

Global markets have been sent into spasms this month as the yield on US Treasury bills has risen to four-year highs, with Federal Reserve interest rates expected to be hiked further this year owing to a droning economy and rising wages.

There are also warnings that the yield on US T-bills could spike to 3.5 percent, which would mark a level not seen since 2010.

Asian markets were in the green as dealers picked up bargains. Tokyo, which was closed Monday for holiday, jumped 1.3 percent by the break.

Hong Kong climbed 2.3 percent after falling more than nine percent over the past week, while Shanghai added 1.8 percent. Seoul and Singapore were each up more than one percent while Sydney put on 0.5 percent. Jakarta, Manila and Kuala Lumpur were also coming up.

Dealers were given a positive cue from Wall Street and Europe, where all major indexes finished more than one percent higher.

Stephen Innes, head of Asia-Pacific trading at OANDA, said: “Equity markets have begun the week picking up on a positive note from Friday’s rebound as bargain hunters have returned on the first sign of stability.

Critical US inflation data revealed the market is trying to find a positive equilibrium, adding that market will be more bearable if it can get through relatively unscathed in the coming weeks.

Meanwhile, the South African rand was being sold on political uncertainty as ruling ANC decided to remove scandal-tainted President Jacob Zuma as head of state.

 

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