* Graphic: World FX charges http://tmsnrt.rs/2egbfVh
* Graphic: International flows into Asian shares https://tmsnrt.rs/3f2vwbA
* Thai inventory index up 1.7% as power shares acquire
* Excessive U.S. Treasury yields hold Asian bond yields elevated
* Rising gas costs might damage consumption in India – BofA
By Rashmi Ashok
Feb 23 (Reuters) – Asian equities firmed on Tuesday, as rising commodity costs fuelled market expectations that international financial restoration was gathering steam, whereas bond yields remained elevated after the current spike in U.S. Treasury yields.
The Thai index led positive factors within the area, buying and selling 1.7% larger as its heavyweight power shares gained on rising crude costs.
“The dip consumers are out in Asia, with U.S. futures all monitoring larger and Asia-Pacific equities using the cyclical upturn commodity wave,” stated Jeffrey Halley, senior market analyst at OANDA.
Focus turns in direction of U.S. Federal Reserve Chairman Jerome Powell’s Congressional testimony due later within the day, the place feedback on larger inflation outlook and rising yields might be carefully watched.
“Asia has in all probability seen one of the best of the intra-day rally now, with the dangers across the Powell testimony this night prone to mood exuberance.”
Longer-dated bond yields within the area remained excessive, with yields on Indonesia’s 10-year bonds , usually seen as a favorite within the area, rising as a lot as 9 foundation factors to six.754 – highest since mid-October.
Rising U.S. Treasury yields have dented the lustre of Asia’s high-yielding bond markets, whereas expectations of steeper borrowing prices and better inflation additionally cut back the attractiveness of rising economies with much less steady currencies and public funds.
In accordance with Refinitiv Lipper, rising market bond funds confronted outflows for the primary time in 21 weeks within the week ended Feb. 17, with outflows of $689 million. bond yields additionally historically draw funds away from equities by offering safer long-term returns, and a swap from high-flying tech shares specifically has been on the coronary heart of a current halt in international inventory markets’ lengthy rally.
Most Asian rising currencies strengthened because the U.S. greenback hit a six-week low.
The Indian rupee INR=IN strengthened to 72.333 per greenback. It has risen repeatedly for the final three months, and is up practically 1% to date in February, as India’s financial outlook brightened amid a drop in COVID-19 circumstances.
Analysts in Financial institution of America (NYSE:) Merrill Lynch stated in a word that whereas excessive FX reserves would protect the rupee from rising oil costs, a rise of $10 per barrel might probably cut back consumption demand by 0.4% of gross home product.
India imports nearly all of its oil.
“We proceed to count on an oil tax lower to melt retail costs. A aid is that this may be funded by the Reserve Financial institution of India‘s Open Market Operations as the upper oil import invoice will lower FX intervention,” the BofA analysts wrote.
** Prime gainers on Thailand’s SETI embody Group Lease PCL and TWZ Company PCL that rose 28.57% and 14.29%, respectively.
** Prime gainers on Bursa Malaysia Kl Index embody Genting Malaysia Bhd up 3.99% and Genting Bhd up 3.79%.
** Indian shares on observe to snap 5 straight periods of losses.
Asia inventory indexes and
currencies at 0704 GMT
COUNTRY FX RIC
FX INDE STOCKS STOCK
DAILY YTD %
X DAILY S YTD
0.01 4.63 ia
0.28 -3.22 a
0.06 -4.55 ines
0.69 2.02 re
1.47 3.49 d