Asia shares near two-year high as US hi-tech rebound boosts mood

TOKYO: Japan‘s Nikkei rose more than 1 per cent to a near two-year high on Tuesday, encouraged by rebound in US hi-tech shares as investors bet on solid growth in the economy and corporate profits globally.

European shares seen extending gains, with spread-betters expecting Germany’s DAX to rise 0.2 per cent from Monday’s record closing high. France’s CAC is expected to open 0.3 per cent higher while Britain’s FTSE is seen up 0.1 per cent.

MSCI‘s broadest index of Asia-Pacific shares outside Japan held firm near a two-year high struck last week, but was little changed on the day.

Taiwan shares hit a 17-year high but gains in high-tech firms were offset by a decline in Australian shares .

A big focus for Asia is whether index provider MSCI will later in the global day open up its Emerging Markets Index to Chinese mainland shares which have restricted access for foreign investors.

Many investors expect the so-called A shares that make up the majority of China’s stock market to likely be included after being rejected on three previous occasions.

The blue-chip CSI300 index of mainland stocks was down 0.2 per cent.

Wall Street’s S&P 500 and the Dow industrial average hit record highs as technology shares bounced back after some sudden falls earlier this month.

“Hi-tech shares just went through a correction. Their valuation is not that expensive, standing far below their levels at the peak of the dot-com bubble in 2000. Given that their profits are expected to see exponential growth in coming years, it is premature to say the rally in hi-tech shares is over,” said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

US financial shares also gained as US debt yields rose after New York Federal Reserve President William Dudley, a close ally of Fed Chair Janet Yellen, said US inflation should rebound alongside wages as the labour market continues to improve.

The 10-year US Treasuries yield edged up to 2.184 per cent from a seven-month low of 2.103…

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