In This Article:
(Rewrites throughout with Asian shares, analyst comments, updated levels)
* MSCI Asia ex-Japan up on Wednesday on economic recovery hopes
* Index on track for its first monthly loss since October 2020
* U.S. dollar hovers near one-year highs against Japanese yen
* Oil ticks higher, gold edges down
By Swati Pandey
SYDNEY, March 31 (Reuters) - Asian stocks were on track for their first monthly loss since last October though markets were up on Wednesday and the U.S. dollar stood tall as investors focused on growing signs of a sure-footed global economic recovery.
MSCI's broadest index of Asia-Pacific shares outside of Japan climbed for a fourth consecutive day to a one-week high of 682.36 points. The index, last up 0.4%, was still a fair distance away from an all-time peak of 745.89 touched just last month.
For the month so far, the index is down 1.6% to be on track for its first loss in five months. It is also poised for its smallest quarterly gain since a 21% fall in March 2020 when the coronavirus pandemic brought the world to a standstill.
As many countries rolled out the coronavirus vaccine, investors wagered on a quicker-than-anticipated economic recovery by dumping safe haven bonds, triggering a sudden and massive jump in yields that in-turn spooked equity investors.
Technology shares were at the receiving end of the so-called "term premium tantrum" as they were seen as being vulnerable to rising interest rates.
Analysts at Blackrock said that view was "too simplistic", adding they still liked tech stocks.
Wall Street ended lower overnight as higher yields weighed on tech shares, but financial stocks rose helped by signs the fallout from the Archegos meltdown would be largely contained.
"Tech is a diverse sector and the driver of higher yields matters more than the rise itself," Blackrock said in a note to clients.
"Our new nominal theme implies central banks will be slower to raise rates to curb inflation than in the past, supporting our pro-risk stance and preference for tech."
Over a 6-12 month period, Blackrock is "overweight" equities in the United States, Emerging Markets, Asia ex-Japan and UK. It is "underweight" U.S. Treasuries, expecting a nominal increase in yields.
"The 'term premium tantrum' mostly reflects investors requiring higher compensation for the now greater risks to portfolios presented by government bonds and inflation, in our view," Blackrock said.
"This makes equities even more appealing than bonds in a multi-asset context – and suggests any further sell-offs in tech may present opportunities."