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Asia shares set to follow Wall Street's tech-driven rally

Published 18-08-2020, 05:32 am
© Reuters.
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By Chibuike Oguh

NEW YORK, Aug 17 (Reuters) - Asian equities were poised to track Wall Street's tech fueled rally on Tuesday that saw the Nasdaq benchmark hit a fresh record while oil prices perked up on Chinese demand and hopes Sino-U.S. trade tensions were easing.

Technology stocks continued their recent rally as investors see them as a firm beneficiary of coronavirus lockdowns, which have fueled demand for products and services that enable people to work from home.

"We saw some strength in tech again with semiconductors driving the boat," said Thomas Hayes, chairman at Great Hill Capital. "We continue to see this push between growth and tech, between cyclical and value stocks. It's a back-and-forth thing."

Australian S&P/ASX 200 futures YAPcm1 rose 0.52%, while Hong Kong's Hang Seng index futures .HSI HSIc1 rose 0.56%.

On Wall Street, Nvidia Corp NVDA.O was among the top boosts to the S&P 500 and Nasdaq for the day, surging 6.7% to a record high after analysts raised their price targets ahead of the chipmaker's quarterly results on Wednesday.

In June, the Nasdaq became the first of the major Wall Street indexes to recoup its coronavirus losses as several of its largest constituents, including Amazon.com Inc AMZN.O and Netflix Inc NFLX.O , benefited from curbs on social activity.

The Dow Jones index, however, was weighed down by losses to financial and industrial stocks after Warren Buffett's Berkshire Hathaway (NYSE:BRKa) Inc BRKa.N slashed its stakes in some of the largest U.S. banks, including Wells Fargo (NYSE:WFC) & Co WFC.N and JPMorgan Chase (NYSE:JPM) & Co JPM.N .

"Warren Buffet trimming financials at the market bottom was a surprise move," Hayes said.

The Dow Jones Industrial Average .DJI fell 0.31%, the S&P 500 .SPX gained 0.27%, and the Nasdaq Composite .IXIC rose 1%.

Oil prices rose on hopes of a rebound in Chinese demand after two state-owned firms tentatively booked tankers to transport at least 20 million barrels of U.S. crude for August and September despite ongoing Sino-American tensions. prices were also buoyed by reports that OPEC+ producers almost fully complied in July with their global production cut accord.

Brent crude LCOc1 settled up 57 cents, or 1.3%, to $45.87 a barrel, and U.S. West Texas Intermediate crude CLc1 gained 88 cents, or 2.1 %, to $42.41 a barrel.

Investors are looking ahead to Wednesday, when the Federal Reserve releases minutes from its latest policy meeting. Speculation is rife that the Fed will adopt an average inflation target, which would seek to push inflation above 2% for some time.

That view, combined with massive new debt supply, caused a sharp increase in longer-term bond yields last week, with 30-year yields US30YT=RR rising 21 basis points as the curve steepened.

Benchmark 10-year notes US10YT=RR last rose 6/32 in price to yield 0.6915%, from 0.709% late on Friday, while the dollar index =USD fell 0.215%, with the euro EUR= up 0.24% to $1.187.

Safe haven gold closed higher after Berkshire Hathaway also disclosed a stake in Toronto-based Barrick Gold Corp ABX.TO , one of the world's largest mining companies.

Spot gold XAU= added 2.1% to $1,984.13 an ounce. U.S. gold futures GCc1 gained 2.01% to $1,975.90 an ounce.

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