The Shanghai Composite index added 0.79% despite rising tensions between Beijing and Washington
Wall Street stocks rose on Tuesday as investors digested strong corporate earnings, with tech companies and banks leading gains during the session. In individual stocks, Harley-Davidson rallied more than 15% after the giant reported a surprise profit for the fourth quarter. Adding to a positive tone, the US House has passed a funding bill to avoid a government shutdown to keep the federal government open until March 11. The bill now goes to the upper house for its vote. As such, the Dow Jones Industrial Average gained 1.06%, the S&P 500 added 0.84%, and the Nasdaq Composite advanced 1.28%. For the week, the S&P 500 is up 0.5%, the Dow is up 1.1%, and the Nasdaq adds 0.7%.
Following suit, Asian shares advanced on Wednesday, with MSCI’s broadest index of Asia-Pacific shares outside Japan gaining 1% to its highest in two weeks. The Nikkei 225 in Tokyo added 1.08% while the South Korean Kospi advanced 0.81%. In China, the Shanghai Composite index added 0.79% despite rising tensions between Beijing and Washington. Earlier today, China vowed to take countermeasures after the US announced a plan to sell $100 million worth of Patriot missile upgrades to the island of Taiwan.
Meanwhile, the dollar looks steady, refraining from a more robust ascent even as US 10-year Treasury yields hit fresh pandemic-era highs around 1.97%, approaching the 2% mark. The USD index looks directionless around 95.60 on Wednesday after yesterday’s rejection from the 95.75 zone. EURUSD keeps flirting with the descending 100-DMA while desperately trying to hold above the 1.1400 figure. However, it looks like the pair will dip below this support zone in the short term and could extend the retreat in the coming days if the US CPI report shows consumer prices rose to fresh nearly 40-year highs in January.
Elsewhere, gold prices have been trading north for the fourth session in a row on Wednesday. The XAUUSD pair climbed to fresh February highs just below the $1,830 figure before retreating marginally in recent trading. The bullion has been retaining bullish bias since late January, but a reversal could take place in the near term if the greenback receives a strong boost from inflation data. In this scenario, the market focus would shift back to the $1,800 figure.
