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Asian technology stocks rose on Thursday, following their US-listed counterparts, although broader gains were limited by US dollar strength as investors bet on a faster interest rate hike in the United States than in other major economies.
European shares were expected to rise, with Euro Stoxx 50 futures up 0.5% and FTSE futures up 0.24% in early trade, which may indicate a recovery from a week of rising COVID cases in Europe affecting market sentiment.
Japan's Nikkei rose 0.8%, helped by shares in technology companies such as Sony, which rose 1.5%, while Hong Kong's tech index suffered a six-session loss, up 0.85% from a 0.25% gain on the local benchmark.
Alibaba was in the lead, adding 2.7%.
Analysts at https://fx-exness.com/loginexness/ believe the rise largely followed a rise in US technology stocks overnight as investors decided the sell-off triggered by the prospect of higher US interest rates had gone too far.
However, other stock movements were more subdued. The broadest index of Asia-Pacific equities outside Japan, MSCI, traded flat on both sides and was last higher by 0.06%.
In general terms, "when it comes to regional equity allocations, we're seeing the US dollar hitting new highs and being a drag on emerging market equities," said Fook-Hien Yap, senior investment strategist at Standard Chartered Bank Rich. management.
The dollar is trading near its highest level in almost five years against the Japanese currency at 115.3 yen and is testing an almost 18-month high against the euro at $1.1211.
In support of the dollar, several US Federal Reserve policymakers said they would be prepared to accelerate cuts in the central bank's bond-buying programme if high inflation persists and take faster steps to raise interest rates, according to minutes from the Fed's November meeting. Two to three policy meetings are shown.
"The market is currently expecting more than two rate hikes next year, but we think that's too aggressive. We expect only one increase next year," Yap said.
These expectations have led to a rise in US Treasury bond yields, albeit inconsistently: the 10-year bond yield was 1.6427% last time out, rising 1.6930% on Wednesday.
US treasury bonds will not be traded on Thursday because of the Thanksgiving holiday. US stock markets will also be closed and will have a shortened session on Friday.
In other central bank news, the Bank of Korea raised its policy interest rate by 25 basis points on Thursday, as expected, as concerns about household debt and inflation offset uncertainty over the renewed COVID-19 cases.
Oil prices rose slightly after a turbulent few days during which the United States said it would release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and the UK to try to lower oil prices after calls for OPEC pump still went unheeded. However, investors questioned the effectiveness of the programme, pushing prices higher.
Brent crude was at $82.53 a barrel, up 0.33%, while US crude was at $7856, up 0.2%.
Spot gold rose 0.17% to 1791 an ounce.
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