Asian exchanges opened variously on Wednesday (3/3/2021), amidst the weakening of the United States (US) stock market as a result of profit taking by investors after soaring high in trading Monday (1/2 / 2021) US time.
The Japanese Nikkei index was recorded to have opened up 0.25%. Then, the Hang Seng grew 0.53%. And Singapore’s Straits Times Index (STI) appreciated 0.41%.
Meanwhile, China’s Shanghai Composite index opened down 0.24% and South Korea’s KOSPI fell 0.18%.
In Asia, the economic data released this morning is the Japanese Services Purchasing Manager Index (PMI) by Jibun Bank (Markit).
The Japan Services PMI recorded rose 0.2 points to 46 , 3 from the previous at 46.1. PMI uses the number 50 as a starting point. If it is above 50 then the business world is still expanding.
Turning to the United States (US). The Wall Street stock exchange closed lower in trading Tuesday (2/3/2021) local time, as a result of being hit by profit taking by investors.
The Dow Jones Industrial Average (DJIA) fell 0.41% to 31,391.52, the S&P 500 fell 0.81% to 3,870.29, and the Nasdaq Composite fell 1.69% to 13,358.79.
Cyclical Sector Continues to Soar
Cyclical sectors such as energy and financial continue to outperform market expectations amid optimism about vaccines and economic recovery. While the slack in the rate of increase in US government bond yields shared positive sentiment for technology stocks.
“Anxiety around yield is likely to be responsible for the S&P 500’s correction of 3% from its February high,” said Mark Haefele, Head of Investments at UBS Global Wealth Management, in a research report quoted by CNBC International.
The disruption, he continued, was temporary and investors would return to spinning their money on the stock market. The increase in yields, however, is driven by optimism that the economy will grow, and not automatically trigger wild inflation.
Investors tend to wait for comments from US Financial Services Authority (SEC) chairman Gary Gensler and Fed Governor Lael Brainard who will talk about US financial and economic conditions, as well as inflation expectations.