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GLOBAL MARKETS-Asian shares firm after solid U.S. data, tech sector hopes

Published 22/03/2019, 12:13 pm
Updated 22/03/2019, 12:20 pm
© Reuters.  GLOBAL MARKETS-Asian shares firm after solid U.S. data, tech sector hopes

* Asian shares gain after Wall St on data, tech hopes

* U.S. bond yields at lowest since early 2018

* Pound under pressure, EU demand UK decision by Apr 12

* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Hideyuki Sano

TOKYO, March 22 (Reuters) - Asian shares advanced on Friday after upbeat data and optimism in the tech sector lifted Wall Street stocks, helping calm some of the jitters sparked by the Federal Reserve's cautious outlook on the world's biggest economy.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.25 percent while Japan's Nikkei .N225 gained 0.3 percent.

On Wall Street, the S&P 500 .SPX gained 1.09 percent while the Nasdaq Composite .IXIC rallied 1.42 percent, with the Philadelphia SE Semiconductor Index .SOX soaring 3.5 percent.

Apple Inc AAPL.O led the tech sector's advance, rising 3.7 percent, ahead of the company's expected streaming service debut next week.

Thursday's U.S. economic data was upbeat as initial claims for jobless benefits USJOB=ECI fell more than expected and mid-Atlantic factory activity USPFDB=ECI rebounded sharply. figures mollified worries about the U.S. economic outlook after the Fed on Wednesday surprised investors by adopting a sharp dovish stance, anticipating no further interest rate hikes this year and ending its balance sheet rolloffs.

The dollar also jumped back, with its index against a basket of six major currencies =USD rising to 96.316 from Wednesday's 1-1/2-month low of 95.735.

The euro traded at $1.1377 EUR= , off Wednesday's 1-1/2-month high of $1.14485.

The dollar stood at 110.77 yen JPY= , having hit a five-week low of 110.30 on Thursday.

The benchmark U.S. 10-year notes US10YT=RR yield slipped to as low as 2.500 percent on Thursday, its lowest since early January last year.

The five-year yield dropped to 2.34 percent US5YT=RR , below the current Fed funds rate around 2.40 percent, as fed funds futures 0#FF: price in about 50 percent chances of a rate cut this year.

"The main market reaction to the Fed's announcement was that it has become a consensus that the Fed's next move is a rate cut," said Naoya Oshikubo, senior manager at Sumitomo Mitsui Trust Asset.

"As economic data from China and elsewhere has not bottomed out yet, investors will be looking at economic fundamentals for now. If there are improvements, then markets could roll back expectations of a Fed rate cut," he said.

Another cloud hanging over markets was Britain's fraught moves to exit from the European Union, as the British pound was bruised anew by rising worries about a no-deal Brexit.

EU leaders said Britain could leave the European Union without a deal on April 12 if lawmakers fail next week to back Prime Minister Theresa May's agreement with Brussels. leaders gave May an extra two months, until May 22, to leave if she wins next week's vote in parliament.

The pound traded at $1.3124 GBP=D4 , having dropped to $1.3004 the previous day. Against the euro, it hit one-month low of 0.8722 to euro EURGBP=D4 on Thursday and last stood at 0.8664.

Oil fell held near 2019 highs, supported by a broad risk-on mood, OPEC production cuts and U.S. sanctions on key producers Iran and Venezuela.

U.S. crude CLc1 traded flat at $59.98 a barrel. (Editing by Shri Navaratnam)

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