SINGAPORE, April 26 (Reuters) – US stock futures rallied as buybacks and gains boosted the tech giants in after-hours trading and helped Hong Kong sentiment on Wednesday, but bank nerves kept the bonds well-bid and the dollar leaned cautious Asia session.
Nasdaq futures rose 1.3% and S&P 500 futures 0.4% after better-than-expected gains at Microsoft (MSFT.O) and a $70 billion share buyback at Google parent Alphabet (GOOGL.O). Both stocks rose after the bell.
Facebook parent Meta Platforms (META.O) reports later in the day that US markets are on edge over softening US data and renewed regional banking jitters.
MSCI’s broadest index of Asia-Pacific equities outside of Japan (.MIAPJ0000PUS) hit a one-month low before recovering slightly to trade 0.3% higher in the afternoon session.
European futures were last down 0.6%.
On Tuesday, shares in First Republic Bank (FRC.N) sold to a record low after the bank announced a $100 billion drop in deposits.
The Wall Street Journal’s “Fed Whisperer” Nick Timiraos also wrote an article entitled “Why the banking chaos is not over,” including comments from former Dallas Fed President Robert Kaplan, who said banking troubles are yet to come have a long way to go.
The S&P 500 (.SPX) and Nasdaq (.IXIC) both fell sharply, while bonds rallied and interest rate futures markets priced in a higher likelihood of Fed cuts later in the year.
The US dollar strengthened against most majors across the board, with the exception of the safe-haven yen, and moves in the bond and currency markets stalled.
“The fear factor has clearly led to dollar gains,” analysts at Mizuho said.
“Fear of contagion and the repeated mantra of isolated incidents has inevitably led to ‘timid’ and yield-seeking depositors seeking banking with the US Treasury,” they said, citing the broad rally in bonds.
Two-year government bond yields fell 18.7 basis points on Tuesday and were steady at 3.9365% in Asia. 10-year yields fell nearly 12 basis points, the sharpest decline in more than a month. Yields fall when bond prices rise.
Elsewhere the mood was nervous. Investors brushed aside a record loss in South Korean chipmaker SK Hynix (000660.KS) as it forecast improving market conditions. The Hang Seng Tech Index (.HSTECH) swung from small losses to a 2% gain.
Aussie inflation retreated from 33-year highs, pushing the Australian dollar to a 6-week low of $0.6603 and confirming market bets that the central bank will leave rates unchanged at next week’s meeting.
The euro last traded at $1.0987. Gold was just under $2,000 an ounce.
Brent crude futures fluctuated at $81.35 a barrel after falling nearly 4% overnight on risk-off sentiment.
Editing by Sam Holmes
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