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Asia shares dampened by tech retreat, US futures secure

© Reuters. FILE PHOTO: A man walks past a stock market quote at a broker in Tokyo, Japan on Feb.26, 2021. REUTERS / Kim Kyung-Hoon

Posted by Wayne Cole

SYDNEY (Reuters) – Asian stocks tried to avoid a fourth straight session on Wednesday as US stock futures stabilized after a decline in large-cap tech darlings.

The holidays in Japan, China and South Korea helped cushion the markets, bringing MSCI's broadest index for stocks in the Asia-Pacific region outside of Japan up 0.1%.

closed, but futures made up for early losses and stood at 28,850 compared to the last cash close of 28,812.

India's Nifty 50 rose 0.7% ahead of a speech by the country's central bank governor that could include policy changes in support of the pandemic-hit economy.

After falling sharply overnight, the Nasdaq futures rose 0.3% to gain 0.3%.

The Nasdaq was down 1.9% on Tuesday as some big tech names took profits, including Microsoft Corp. (NASDAQ :), Alphabet (NASDAQ 🙂 Inc, Apple Inc (NASDAQ 🙂 and Amazon.com Inc (NASDAQ :). ()

Stretched valuations were tested when Treasury Secretary Janet Yellen said interest rate hikes may be needed to halt the economy from overheating.

It later woke the comments back, but it did remind investors that interest rates would have to rise at some point in the future.

"Moderate inflation and a slow moving Fed would continue to be positive, but inflation and a reactive Fed could prove negative for valuations," said Tapas Strickland, economics director at NAB.

"Either way, returns and stocks in the dance should be so much better than expected. Economic data continues to challenge central bank guidelines."

Such a challenge looms on Friday when US wages and salaries data are projected to surge by 978,000, while some estimates are as high as 2.1 million.

So far, US Federal Reserve chairman Jerome Powell has argued that the labor market is still far from where it needs to be to speak of a tapering asset purchase.

Minneapolis Fed Bank President Neel Kashkari, a notable pigeon, said Tuesday it could take several years for the economy to return to full employment.

The Fed's persistent patience allowed yields on 10-year US debt to drop to 1.59% from 1.69% last week, despite the market struggling to break below 1.53%.

Just mentioning higher US interest rates was enough to help the dollar offset some of its recent losses.

The euro fell to $ 1.2020 and threatened to break key chart support in the $ 1.1995 / $ 1.2000 area. A break would pave the way to a retracement target at $ 1.1923.

The dollar held at 109.27 yen after shying away from resistance at 109.61. The dollar fell against a basket of currencies to 91.180 but remained well above the recent two-month low of 90.422.

The New Zealand dollar rose to $ 0.7173 as local employment data proved stronger than expected.

In the commodities markets, palladium rose to a record high on worries over shortages of the metal used in exhaust gas cleaning equipment in automobiles. (GOL /)

Gold trailed at $ 1,783 an ounce.

Oil prices rose to seven-week highs as more countries opened their borders to travelers and improved demand prospects for gasoline and jet fuel. (OR)

added 54 cents to $ 69.42 a barrel, almost its highest level since mid-March, while rising 52 cents to $ 66.23 a barrel.

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