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GLOBAL MARKETS-Asian stocks rise as Apple drives tech gains, virus worries ease

Published 29/01/2020, 02:00
© Reuters.  GLOBAL MARKETS-Asian stocks rise as Apple drives tech gains, virus worries ease
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* Asian stock markets: https://tmsnrt.rs/2zpUAr4

* Pessimism about China virus recedes

* Treasury yield rise shows risk appetite has improved

* Oil market eyes OPEC output cuts

By Stanley White

TOKYO, Jan 29 (Reuters) - Asian shares rose on Wednesday as

better-than-expected Apple Inc earnings drove some regional tech

gains although broader confidence was capped by worries about

the economic impact of China's virus outbreak.

MSCI's broadest index of Asia-Pacific shares outside Japan

.MIAPJ0000PUS rose 0.2%, ending four days of losses.

Australian shares .AXJO rose 0.41%, while Japan's Nikkei stock

index .N225 rose 0.27%.

While China's flu-like illness, which has killed more than

100, continues to keep markets on edge, there were signs

investors see the recent rout in asset prices as overdone.

Long-term U.S. Treasury yields traded above short-term

yields and the Japanese yen nursed losses as investors pulled

back from safe-havens in favour of more risky assets like

equities.

Oil futures extended gains in Asia as pessimism about the

virus eased somewhat and after OPEC sources said the cartel

wants to extend crude output cuts by three months to June,

easing concern about excess supplies.

Other investors say the growing number of travel

restrictions within China and the cancellation of international

flights could prevent a significant worsening of the virus.

"The rise in Treasury yields shows the risk-off trade is

falling out of favour," said Kiyoshi Ishigane, chief fund

manager at Mitsubishi UFJ Kokusai Asset Management Co in Tokyo.

"This is supportive of Japanese stocks. You can buy Asian

shares too, but I would not get too aggressive while Chinese

markets are closed."

U.S. stock futures ESc1 fell 0.12% in Asia on Wednesday.

The S&P 500 .SPX rose 1.01% on Tuesday, rebounding from its

worst daily decline in four months on Monday, as shares of Apple

Inc AAPL.O ahead of its fourth-quarter results.

After the market close, Apple reported better-than-expected

profits for the fourth quarter and forecast revenue in the

current quarter above Wall Street expectations. The yield on benchmark 10-year Treasury notes US10YT=RR

rose to 1.6493% versus a yield of 1.5821% on three-month

Treasury bills US3MT=RR in another sign that sentiment has

stabilised.

The yield curve briefly inverted on Tuesday when 10-year

yields fell below their 3-month counterparts for the first time

since October. An inverted yield curve has historically been an

indicator of looming recession. Markets in Asia could be subdued before the U.S. Federal

Reserve meeting later on Wednesday. The Fed is expected to

reiterate its desire to keep rates unchanged at least through

this year.

In currency markets, the safe-haven yen JPY=EBS was quoted

at 109.13 per dollar following a 0.2% loss on Tuesday. The Swiss

franc, another popular safe haven, traded at 0.9730 versus the

dollar, close to its lowest in almost three weeks.

In the offshore market, the yuan CNH=D3 rose for a second

day to 6.9605 per dollar. China's onshore markets are closed for

the Lunar New Year holidays.

U.S. crude CLc1 ticked up 0.47% to $53.73 a barrel in

Asian trading.

OPEC wants to extend current oil output cuts until at least

June from March, with the possibility of deeper reductions on

the table if oil demand in China is significantly impacted by

the spread of a new coronavirus, OPEC sources said. Sterling GBP=D3 edged lower to $1.3022, on course for its

fifth day of declines due to worries about Britain's trading

relationship with the European Union. Investors are also cautious ahead of a Bank of England

policy decision on Thursday, which many analysts say is too

close to call.

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