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GLOBAL MARKETS: Nervousness grips markets ahead of Fed and results

Por Stanley White

TOKYO, Apr 27 (Reuters) – Asian stocks were barely changing on Tuesday, as cautious at the US Federal Reserve meeting and corporate results offset optimism about a global recovery from the COVID-19 pandemic.

The MSCI Asia-Pacific equity index – which excludes Japan – was up 0.01%. Australian shares were down 0.19%, and China shares were down 0.08%. Tokyo shares were down 0.23%.

S&P 500 stock e-mini futures were up 0.2%.

Euro Stoxx 50 futures were down 0.05%, German DAX futures were down 0.08% and FTSE futures were down 0.07%, pointing to a soft start to the European session.

Oil rebounded after major oil producers maintained their demand forecasts, although downside risks remain due to rising COVID-19 cases in India, the world’s third-largest oil importer.

According to analysts, some investors may be reaping profits in equities, but sentiment remains positive due to rising coronavirus vaccination rates in many countries.

“There are two reasons to remain positive on equities and commodities,” said Masayuki Kichikawa, chief macroeconomic strategist at Sumitomo Mitsui Asset Management Co in Tokyo.

“The world economy is likely to continue to strengthen and many advanced economies are heading for a reopening thanks to advances in vaccination.”

However, despite the promising signs, a bullish session on Wall Street failed to inspire Asian markets. The S&P 500 and the Nasdaq closed at record highs on Monday, driven by the heavyweights of growth stocks ahead of this week’s onslaught of earnings reports. The Dow Jones ended 0.18% lower.

In trading on electronic platforms after the official market close, Tesla fell 0.4%, even after the electric car maker beat Wall Street expectations for first-quarter revenue.

Equity optimism in many markets has steadily improved this month on expectations that higher vaccination rates will allow more economies to resume normal activity.

However, one of the focuses of attention is in India, which is battling a wave of coronavirus infections that has overwhelmed its healthcare system.

Many investors were on the sidelines ahead of the Federal Reserve’s monetary policy meeting ending Wednesday, in which the US central bank is expected to confirm that it will maintain its loose monetary strategy to bolster the economy.

Bond traders are also on the lookout for the auction of $ 62 billion of seven-year US Treasuries that takes place on Tuesday.

The Treasury saw very little demand in the seven-year debt auction held in February, prompting a brutal sell-off in markets around the world. In March, demand for the bonds was also low, although it improved.

Before the auction results, seven-year yields were up 1.2689%, while benchmark 10-year yields were up slightly to 1.5774%.

The dollar remained in a narrow trading range, as traders avoided taking large positions before the bond auction and the Fed meeting.

The yen was down from a seven-week high against the dollar after the Bank of Japan lowered its consumer price forecast just a week after Tokyo and Osaka entered their third state of emergency due to a spike in coronavirus infections.

US crude was up 0.74% at $ 62.37 a barrel, and Brent crude was up 0.72% at $ 66.12 a barrel, but oil’s rally could be limited due to concerns about the comeback. travel restriction in response to the coronavirus outbreak in India.

Bitcoin was little changed and stood at $ 53,918. The world’s most popular cryptocurrency soared nearly 10% on Monday, after five consecutive days of losses, following news that JPMorgan Chase is planning to offer a Bitcoin managed fund.

Bitcoin had slumped nearly a fifth from its all-time high reached earlier this month.

Its rival, the digital asset Ether, was stable at $ 2,528.

(Information from Stanley White; edited by Shri Navaratnam and Jacqueline Wong; translated by Flora Gómez at the Gdansk newsroom)

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