Asian tech stocks surge, Chinese real estate stocks rally as Evergrande makes payment

  • Tech stocks follow US peers higher ahead of FAANG earnings
  • Chinese real estate stocks rally after surprise payment from Evergrande
  • Cyclical stocks crash as markets price higher inflation

TOKYO, Oct.22 (Reuters) – Tech stocks surged in Asia on Friday, after their US peers rose, while Chinese real estate stocks rallied following a surprise interest payment by the riddled property developer of China Evergrande Group debt.

Meanwhile, cyclical stocks have lagged amid concerns that central bankers will need to tighten monetary policy to slow growth in order to fight persistent inflation.

Regional bond yields rose along with those of US Treasuries, where the market built in higher inflation by narrowing the spread between short and long-term yields and pushing equilibrium rates to their highest since 2012.

The dollar held onto its gains overnight – when it rose the most since the start of last week against its major peers – as better employment and housing data strengthened the case for faster reduction in Federal Reserve stimulus and past interest rate hikes.

Japan’s Nikkei (.N225) rose 0.7%, led by tech stocks, while energy stocks were the biggest drag. The larger Topix (.TOPX) added 0.3%, with a 0.6% jump in the Topix Growth Index (.TOPXG) well outpacing a 0.1% lead for the Stock Index ( .TOPXV).

Chinese blue chips (.CSI300) gained 0.3%, with the CSI300 real estate index (.CSI000952) up 2.5%. The Hong Kong Hang Seng (.HSI) rose 0.4%, while an index listing mainland developers listed in Hong Kong (.HSMPI) rose 4.3%.

The Australian benchmark index (.AXJO) slipped 0.2% as commodity-related stocks fell.

China Evergrande Group (3333.HK) transferred funds to a trust account Thursday for a dollar bond interest payment due Sept. 23, a source told Reuters on Friday, days before a deadline that would have plunged the developer. in difficulty in a formal defect. The title jumped 5.4%. Read more

The largest MSCI index for Asia-Pacific stocks excluding Japan (.MIAPJ0000PUS) edged down 0.1%.

Meanwhile, futures on S&P 500 E-minis slipped 0.1% after the cash index hit an overnight closing record, led by the surge in tech stocks.

The S&P 500 (.SPX) added 0.3%, while the Nasdaq Composite (.IXIC) was up 0.6%, although the Dow Jones Industrial Average (.DJI) edged down.

Next week, almost all of the so-called FAANG giants will bring in revenue: Facebook, Apple, Amazon and Alphabet, owner of Google. Netflix (NFLX.O) released its results on October 19 and for the quarter that ended in September, diluted earnings per share stood at $ 3.19, beating analysts’ expectations by $ 2.57 . Read more

“The narrative over the past two days has been focused on earnings and tech stocks led the charge,” said Kyle Rodda, market analyst at IG Australia. “There’s momentum out there, it’s that simple.”

At the same time, he said concerns about growth and inflation have sparked speculation that central banks will raise interest rates, which could dampen growth, and this is especially weighing on cyclical stocks.

Oil prices resumed their ascent on Friday, after falling from multi-year highs reached earlier in the week, amid continued US supply tension.

Brent crude rose 0.2% to $ 84.77, while US West Texas Intermediate crude rose 0.2% to $ 82.65.

The number of Americans filing new jobless claims fell last week to a 19-month low, overnight data showed, indicating a tighter labor market. Read more

Yields on the benchmark 10-year Treasury bill stood at 1.6922%, holding close to a five-month high of 1.7050% reached overnight. Two-year yields at 0.4484% were also close to an overnight high of 0.4560%, a level not seen since March of last year.

The dollar index, which values ​​the greenback against six major rivals, was largely flat at 93.730 on Friday, maintaining the 0.2% gain from the previous session.

The Fed has signaled that it could start cutting stimulus as early as next month, with rate hikes at the end of next year.

Fed Chairman Jerome Powell will speak later Friday at a panel discussion.

Editing by Simon Cameron-Moore

Our Standards: Thomson Reuters Trust Principles.

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