* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Echo Wang
MIAMI, Feb 23 (Reuters) - Asian equities opened lower on Wednesday on concerns about rising interest rates and rich equity valuations and following a downdraft in U.S. and European overnight trading.
The Dow .DJI and S&P 500 .SPX recouped early losses after Federal Reserve Chair Jerome Powell reiterated in testimony before the Senate Banking Committee that monetary policy would remain accommodative and would not change without advance warning. tech-heavy Nasdaq .IXIC index closed down 0.5% as investors sold the big tech stocks that have driven the market rally since last March, and rotated into cyclicals, helping lift the Dow and S&P 500.
But Powell's testimony hasn't fully swept away fears of rising inflation as the economies around the world are expected to rebound this year more strongly than was expected just weeks go as vaccines roll out around the world.
"Despite reassuring words from Mr Powell markets know that if the U.S. inflation ... hits over 2%, then the Fed will have difficulty in maintaining its support for economies and markets", said Michael McCarthy, Chief Markets Strategist at CMC (NS: CMC ) Markets in Sydney.
In early Asia trade, Australia's S&P/ASX 200 .AXJO was down 0.5%, South Korea's KOSPI .KS11 shed 0.4% while Japan's Nikkei 225 .N225 was down 0.9%. Hong Kong's Hang Seng index futures .HSI .HSIc1 were down 0.37%.
U.S. tech stocks fell as investors sold recent winners to rotate into assets that are expected to do well in an improving economy. The tech-heavy Nasdaq .IXIC dropped 0.5% while in Europe tech stocks .SX8P posted their worst two-day decline in four months, falling 3.7%.
Tesla Inc TSLA.O lost 2.2% to close in negative territory for the year, pulled down amid the tech selloff and falling bitcoin BTC=BTSP , which lost 12%. Tesla recently invested $1.5 billion in the cryptocurrency.
Spot gold XAU= added 0.1% to $1,806.25 an ounce.
The 10-year U.S. Treasury note US10YT=RR was down 1.4 basis point at 1.3551% in late U.S. trade. It touched a high of 1.389% early Tuesday before Powell's testimony.
The two-year US2YT=RR U.S. Treasury yield, which typically moves in step with interest rate expectations, was little changed at 0.1169%.
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