Asian stocks fall after Wall St rises on tech gains

Asian stock markets have fallen after Wall Street rose on gains for tech companies and the U.S. Federal Reserve’s promise of support for an economic recovery

Shanghai, Tokyo, Hong Kong and Sydney retreated.

Overnight, Wall Street’s benchmark S&P 500 index rose 0.7% as big technology companies led stocks broadly higher. Amazon, Apple, and Microsoft advanced.

Fed Chairman Jerome Powell said that while the economy was improving, a recovery is “far from complete.” In testimony to Congress, he said the Fed “will continue to provide the economy the support it needs for as long as it takes.”

Powell “kept markets happy” by saying “there was still a long way to go” before tighter monetary policy is justified, Robert Carnell of ING said in a report.

The Shanghai Composite Index lost 1.2% to 3,402.27 while the Nikkei 225 in Tokyo opened higher but had declined 0.4% at midday to 29,059.91.

The Hang Seng in Hong Kong fell 1.4% to 28,494.09. Chinese search engine operator Baidu Inc. rose 0.2% on its first trading day after the company joined the Hong Kong exchange and raised $3.1 billion in a share sale.

The Kospi in Seoul shed 0.9% to 3,008.48 while Sydney’s S&P-ASX 200 lost 0.1% to 6,745.40.

India’s Sensex opened down 0.1% at 50,034.07. New Zealand and Singapore advanced while Jakarta declined.

Investors are wavering between optimism that coronavirus vaccines that might allow business and travel to return to normal and fears of higher inflation after struggling economies were flooded with credit and government spending.

They have been reassured by Powell’s comment earlier that the Fed’s key interest rate will be kept near zero through 2023 even as inflation is forecast to pick up.

On Wall Street, the S&P 500 rose to 3,940.59. The Dow Jones Industrial Average advanced 0.3% to 32,731.20. The Nasdaq climbed 1.2% to 13,377.54.

Amazon rose 1.2% and Apple gained 2.8%, while Microsoft rose 2.4%.

Shares were boosted by a rise in bond prices, which narrowed their yield, or the difference between their market price and the payout at maturity. A rise in yields has been luring investors out of higher-priced tech stocks.

The yield on the 10-year Treasury note narrowed to 1.69% after trading as high as 1.74% last week. The possibility of higher interest rates as yields rise has some investors concerned economic growth might slow.

Also Monday, Kansas City Southern jumped 11.1% for the biggest gain in the S&P 500 after a Canadian railroad announced it would buy the company for $25 billion.

Stocks ended last week in the red as a rise in bond yields caused selling in many parts of the market.

Bank stocks fell. Lower yields potentially mean banks will only be able to charger lower interest rates to borrowers. The KBW Bank Index of the 24 largest banks fell more than 2%.

The U.S.-traded shares of British drug company AstraZeneca rose 4% after British and U.S. health officials said its COVID-19 vaccine was safe and reports of blood clots were outweighed by the vaccine’s health benefits.

In energy markets, benchmark U.S. crude lost 60 cents to $60.96 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 13 cents on Monday to $61.55. Brent crude, the price basis for international oils, retreated 64 cents to $63.98 per barrel in London. It rose 9 cents the pervious session to $64.62 a barrel.

The dollar edged down to 108.76 yen from Monday’s 108.80 yen. The euro retreated to $1.1922 from $1.1942.

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