February 27, 2021

Asian Stocks Rally

The Nikkei 225 index in Japan, which closed at its weakest level since April 2009 on Tuesday, recouped some of the previous session’s losses with a rise of 2 percent by the early afternoon.

In South Korea, the Kospi rallied 3.4 percent. The benchmark index in Taiwan was 2.2 percent higher, while in Hong Kong, the Hang Seng advanced 1.2 percent.

In Australia, the S. P./ASX 200 gained 2.2 percent, after second-quarter growth data showed that the economy had expanded at the surprisingly strong pace of 1.4 percent compared to the same period a year earlier.

Unexpectedly solid services sector data from the United States, released Tuesday, helped stocks on Wall Street pare early losses as investors returned from the Labor Day holiday.

The Dow Jones industrial average dropped 0.9 percent, and the Standard Poor’s 500 index ended down a modest 0.7 percent.

S. P. 500 futures were up 0.5 percent during the Asian morning on Wednesday.

Still, analysts caution that investors will stay nervous, and markets volatile, as the euro zone debt crisis plays out and concerns about the pace of growth in the United States and Europe linger.

HSBC on Wednesday hammered home the point that global economic fundamentals are now significantly weaker than before.

The bank’s team of economists lowered their growth forecasts for this year and next, with particularly marked revisions for the developed world. They forecast that developed economies will expand just 1.3 percent this year, down from a previous projection of 1.8 percent.

Growth in emerging economies will likely hit 6.2 percent, rather than 6.3 percent, they said.

“The developed world has succumbed to economic permafrost,” the team, headed by the global economist Stephen King, wrote in its report. “The message is simple: despite massive policy stimulus, healthy economic recovery is now but a distant dream.”

In the currency markets, the Swiss franc was hovering around 1.20 to the euro after the Swiss national bank on Tuesday surprised investors by saying it would seek to cap the Swiss franc’s value at around that level — a move designed to cushion Swiss exporters from the impact of the currency’s strong rise in recent months.

The Japanese yen, which likewise has risen strongly amid the global turmoil, on Wednesday weakened slightly. By early afternoon, it was trading at 77.24 yen to the dollar. That was about 1 yen weaker than earlier this week — but still much stronger than at the start of this year, when $1 bought about 82 yen.

The price of gold fell, trading at around $1,842 an ounce.

Article source: http://feeds.nytimes.com/click.phdo?i=55373c934cbd11bf850982d5f3499456

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