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Asian stocks are mixed following Wall Street’s gains in the technology sector.

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Asian stocks are mixed following Wall Street's gains in the technology sector.
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Asian stocks are mixed following Wall Street's gains in the technology sector.

Asian stocks are mixed following Wall Street’s gains in the technology sector.

 

Asian stock markets were mixed Tuesday, following Wall Street’s rises in tech stocks and the Federal Reserve’s assurances of support for an economic recovery.

Shanghai, Hong Kong, and Seoul retreated, while Tokyo and Sydney advanced.

The benchmark S&P 500 index rose 0.7 percent overnight as major technology companies led stocks higher. Amazon, Apple, and Microsoft all made strides forward.

Although the economy is improving, Fed Chairman Jerome Powell said that the recovery is “far from complete.” He told Congress that the Fed “will continue to provide the economy with the help it requires for as long as it takes.”

According to ING’s Robert Carnell, Powell “led investors satisfied” by saying “there was still a long way to go” before tighter monetary policy is justified.

Shanghai’s Composite Index fell 0.6 percent to 3,421.88, while Tokyo’s Nikkei 225 gained 0.2 percent to 29,243.44.

Hong Kong’s Hang Seng Index dropped 1% to 28,586.11. Baidu Inc., a Chinese search engine firm, gained 1% on its first trading day since joining the Hong Kong exchange and raising $3.1 billion in a share sale.

Seoul’s Kospi fell 0.4 percent to 3,023.54, while the S&P-ASX 200 in Sydney rose 0.1 percent to 6,761.10. New Zealand and Singapore have made significant progress.

Investors are torn between hope that coronavirus vaccinations would allow business and travel to resume, and concerns of higher inflation as a result of the credit and government spending that has overwhelmed struggling economies.

They have been encouraged by Powell’s earlier announcement that the Fed’s main interest rate will be held near zero until 2023, despite the fact that inflation is expected to rise.

The S&P 500 index increased to 3,940.59 on Wall Street. The Dow Jones Industrial Average increased by 0.3 percent to 32,731.20 points. The Nasdaq Composite Index rose 1.2 percent to 13,377.54.

Amazon increased by 1.2 percent, Apple increased by 2.8 percent, and Microsoft increased by 2.4 percent.

A increase in bond prices increased stock prices by narrowing bond yields, or the gap between the selling price and the dividend at maturity. Investors are leaving higher-priced tech stocks due to increasing yields.

Since trading as high as 1.74 percent last week, the yield on the 10-year Treasury note fell to 1.69 percent. Some investors are worried that the prospect of higher interest rates as yields increase has slowed economic growth.

Also on Monday, Kansas City Southern jumped 11.1 percent, the most in the S&P 500, after a Canadian railroad reported a $25 billion acquisition.

Last week, stocks ended in the red as bond yields rose, causing selling in many parts of the market.

The value of bank stocks fell. Because of the lower yields, banks will only be able to charge borrowers lower interest rates. The 24 largest banks in the KBW Bank Index dropped by more than 2%.

AstraZeneca’s publicly traded stock in the United States grew 4% after British and American health authorities said the COVID-19 vaccine was secure and that reports of blood clots were outweighed by the vaccine’s health benefits.

On the New York Mercantile Exchange, benchmark U.S. crude fell 70 cents to $60.85 per barrel in electronic trading. On Monday, the contract increased 13 cents to $61.55. Brent crude, the international oil price benchmark, fell 74 cents to $63.88 per barrel in London. It gained 9 cents to $64.62 a barrel in the previous session.

The dollar dropped to 108.74 yen from 108.80 yen on Monday. The euro fell from $1.1942 to $1.1926.

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