GLOBAL MARKETS-Asia shares near two-year high as U.S. hi-tech rebound boosts mood


Reuters

* Asian shares flat, Nikkei hits highest since mid-2015
    * Rebound in U.S. tech companies boosts sentiment
    * New York Fed Dudley says U.S. inflation should pick up
    * Oil prices near low so far this year as supply concerns
mount
    * European shares seen up, German shares to hit new record
high

    By Hideyuki SanoTOKYO, June 20 (Reuters) - Japan's Nikkei <.N225> rose more
than 1 percent to a near two-year high on Tuesday, encouraged by
rebound in U.S. hi-tech shares as investors bet on solid growth
in the economy and corporate profits globally.
    European shares seen extending gains, with spread-betters
expecting Germany's DAX <.GDAX> to rise 0.2 percent from
Monday's record closing high. France's CAC <.FCHI> is expected
to open 0.3 percent higher while Britain's FTSE <.FTSE> is seen
up 0.1 percent.
    MSCI's broadest index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> held firm near a two-year high struck last week,
but was little changed on the day.
    Taiwan shares <.TWII> hit a 17-year high but gains in
high-tech firms were offset by a decline in Australian shares
<.AXJO>.
    A big focus for Asia is whether index provider MSCI will
later in the global day open up its Emerging Markets Index
<.MSCIEF> to Chinese mainland shares which have restricted
access for foreign investors.
    Many investors expect the so-called A shares that make up
the majority of China's stock market to likely be included after
being rejected on three previous occasions. [nL1N1JA12M]
    The blue-chip CSI300 index <.CSI300> of mainland stocks was
down 0.2 percent.
    Wall Street'sS&P 500 <.SPX> and the Dow industrial average
<.DJI> hit record highs as technology shares <.SPLRCT> bounced
back after some sudden falls earlier this month.
    "Hi-tech shares just went through a correction. Their
valuation is not that expensive, standing far below their levels
at the peak of the dot-com bubble in 2000. Given that their
profits are expected to see exponential growth in coming years,
it is premature to say the rally in hi-tech shares is over,"
said Mutsumi Kagawa, chief global strategist at Rakuten
Securities.
    U.S. financial shares <.SPSY> also gained as U.S. debt
yields rose after New York Federal Reserve President William
Dudley, a close ally of Fed Chair Janet Yellen, said U.S.
inflation should rebound alongside wages as the labour market
continues to improve. [nL1N1JG0CX]
    The 10-year U.S. Treasuries yield <US10YT=RR> edged up to
2.184 percent from a seven-month low of 2.103 percent touched on
Wednesday, following surprisingly weak U.S. inflation data.
    "Even though the Federal Reserve is about to shrink its
balance sheet, possibly as soon as in September, U.S. bond
yields are kept at low levels, which are very comfortable for
stocks," said Norihiro Fujito, senior investment analyst at
Mitsubishi UFJ Morgan Stanley Securities.
    "Trade volume is light and whether the market continues to
rise depends on whether large cap tech shares continue to
rebound," he also said.
     The rebound in U.S. bond yields helped to lift the U.S.
dollar, which rose to 111.775 yen <JPY=>, its highest level in
more than three weeks.
     The euro <EUR=> traded at $1.1154, just above its two-week
low of $1.11315 set on Thursday.
     The British pound slipped slightly to $1.2735 <GBP=D4> from
Monday's high of $1.2814, held back by uncertainty over domestic
politics and over Britain's economic future, as formal Brexit
negotiations got under way on Monday. [nL8N1JG1X6]
    Oil prices flirted with this year's lows as market players
saw more signs that rising crude production in the United
States, Libya and Nigeria were undercutting OPEC-led efforts to
support the market with output curbs.
    Brent crude futures traded at <LCOc1> $46.92 per barrel,
flat on the day and not far from last week's low of $46.70 and
five-month low of $46.64 touched in early May.
    U.S. crude futures <CLc1> stood at $44.19 per barrel, less
than a half cent above its five-month low of $43.76 set on May
5.
    Safe-haven gold <XAU=> hit a one-month low of $1,243.2 an
ounce as risk sentiment improved, before bouncing back a tad to
$1,245.5.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
MSCI, Nikkei datastream chart    http://reut.rs/2sSBRiD
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Jacqueline Wong and Kim Coghill)
 ((hideyuki.sano@thomsonreuters.com; +81 3 6441 1827; Reuters
Messaging: hideyuki.sano.thomsonreuters.com@reuters.net))

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((For the state of play of Asian stock markets please click on: <0#.INDEXA>))

Keywords: GLOBAL MARKETS/ (WRAPUP 3,PIX)



This article appears in: Politics , World Markets , US Markets , Stocks


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