Asian stocks perk up and treasuries stabilize

Asian shares were higher on Wednesday as investors ignored concerns about how stocks rallied last year. Instead, the focus is now on hopes for more U.S. stimulus at hand to energize the global economic recovery.

MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 1.12%. In Australia, shares were up 0.82%, while the Nikkei stock index in Japan gained 0.45%. In China, shares added 1.27%.

Futures.

E-mini S&P futures climbed 0.36%. 

The Euro Stoxx 50 futures added 0.35%, German DAX futures rose 0.36%, and FTSE futures gained 0.55%.

Wall Street began March with a bang then retreated overnight. On Monday, the S&P 500 staged its best one-day rally in nine months.

Worries that stock prices may be frothy may make it harder for equity markets to hang on to gains, some analysts warned. This is a fear echoed by a top Chinese regulatory official on Tuesday.

Fears that last week’s sell-off in the U.S. Treasuries could resume may also put a lid on stock prices, they said. This has rattled stock markets.

Analysts at TD Securities said in a note, while markets have stabilized, the tone remains tenuous. Investors continue to worry about a further sell-off in rates.

Bond yields.

For the third consecutive day, Benchmark U.S. government bond yields declined again. Investors halted a recent sell-off ahead of a slew of U.S. economic data due for release later this week. 

The yield on 10-year Treasury notes stood at 1.4086%, declining from last week’s high of 1.614%. 

Last week, benchmark yields spiked to a one-year high. This was due to investors’ bets that the U.S. economy will bounce back amid ultra-loose monetary conditions and lead to inflation. Thus, disturbing the stock market last week.

However, Fed officials said that inflation concerns are premature. They warned that rising yields could tighten financial conditions and constrain an economic recovery.

MSCI’s broadest index of global stocks climbed 0.19%.

Asian stocks on the move.

By 10:12 PM ET (3:12 AM GMT), China’s Shanghai Composite rose 1.05%, while the Shenzhen Component added 0.20%. 

Earlier in the day, China released February’s Caixin services purchasing managers’ index (PMI). It stood at 51.5 from 52 in January. Earlier in the week, China’s Caixin manufacturing PMI and the official manufacturing and non-manufacturing PMIs were both released.  

Hong Kong’s Hang Seng Index rose 1.64%, and South Korea’s KOSPI climbed 0.45%.