Jan. 13 (Reuters) – Asian stocks made early trading gains on Thursday after a mixed session on Wall Street, bolstered by expectations of a U.S. stimulus package even as political events in Washington resulted in the removal of the President Donald Trump. Yields on U.S. Treasuries posted their first full-session decline in 2021 after rising for six consecutive sessions as investors consider increasing spending by the new U.S. administration. The benchmark S&P 500 had closed slightly higher on defensive rate-sensitive sectors such as utilities and real estate, while economically sensitive cyclical sectors lagged behind.
“There’s a push-pull relationship between what’s going on in the bond market and the stock markets,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.
“Bond yields have risen on the prospect of increased stimulus spending and if yields continue to rise, there will be some pressure on the stock markets.”
Australian S & P / ASX 200 futures were up 0.21% to start trading, while Hong Kong Hang Seng index futures were up 0.23%.
Intel Corp was the biggest percentage winner in the S&P, advancing 7% after the chipmaker announced it would replace CEO Bob Swan with VMware Inc CEO Pat Gelsinger next month.
Major Wall Street indices hit record highs last week on expectations for a major COVID-19 relief program, which President-elect Joe Biden is due to unveil Thursday.
Following the storming of the United States Capitol, the House of Representatives voted on Wednesday to impeach Donald Trump, making him the first American president to be impeached twice. On Wall Street, the Dow Jones Industrial Average fell 0.03%, the S&P 500 gained 0.23%, and the Nasdaq Composite added 0.43%. Several Federal Reserve officials have objected to the idea of the central bank reducing its asset purchases at any time despite expectations of higher inflation.
The rise in yields is expected to resume, in part due to the effect of the Biden administration’s stimulus package, which kicks off next week. A $ 24 billion 30-year bond auction was well offered, putting pressure on yields. The benchmark 10-year notes last rose 13/32 for a return of 1.0951%, from 1.138% on Tuesday night.
The US dollar rebounded almost three weeks lower on Wednesday, rising largely in hopes of increased government spending.
The dollar index rose 0.357%, with the euro down 0.42% to $ 1.2156. The Japanese yen weakened 0.11% against the greenback to 103.87 per dollar.
Oil prices have fallen as the threat of declining demand from rising global COVID-19 cases offset support for a larger than expected drop in crude inventories in the United States.
US crude recently fell 0.6% to $ 52.89 a barrel and Brent was at $ 56.04, down 0.95% on the day.
Spot gold fell 0.4% to $ 1,848.05 an ounce. Silver fell 1.38% to $ 25.22.
Report by Chibuike Oguh in New York; Edited by Cynthia Osterman