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Asian markets firmer as retail frenzy unsettles outlook

Asian markets firmer as retail frenzy unsettles outlook

FILE PHOTO: People wearing face masks, following the coronavirus disease (COVID-19) outbreak, walk on an overpass with an electronic board showing Shanghai and Shenzhen stock indexes, at the Lujiazui financial district in Shanghai, China January 6, 2021. REUTERS/Aly Song

REUTERS: Asian markets looked set for a modestly firmer start on Tuesday as global markets faced another chaotic week, with retail investors expanding their duel with Wall Street into commodities and driving up the price of silver.

In early Asian trade, Australia's S&P/ASX 200 benchmark was up 0.81per cent and South Korea's KOSPI up 0.79per cent, adding to a rally in the previous session. Japan's Nikkei futures rose 0.6per cent and Hong Kong's Hang Seng index futures eased 0.1per cent.

E-mini futures for the S&P 500 inched 0.07per cent higher in early trading.

Institutional investors are still digesting the retail trading frenzy that has boosted GameStop Corp and other so called meme stocks in recent sessions against their financial fundamentals.

On Monday, amateur investors who have been organizing on social media sites like Reddit and Twitter, set their sights on silver, driving up mining stocks around the world and sending precious metals dealers scrambling for bars and coins to meet demand.

Silver prices rose 6.3per cent after reaching an eight-year peak during Monday trading, while spot gold rose 0.8per cent to US$1,860.93 per ounce. U.S. gold futures settled up 0.7per cent at US$1,863.90.

U.S. stocks also rallied after last week's selloff fueled by gains in technology and mining companies.

The Dow Jones Industrial Average rose 229.29 points, or 0.76per cent, to 30,211.91, the S&P 500 gained 59.62 points, or 1.61per cent, to 3,773.86 and the Nasdaq Composite added 332.70 points, or 2.55per cent, to 13,403.39.

The dollar index rose 0.37per cent against a basket of currencies to a six-week high of 90.955 in late afternoon trading, rising on the back of evidence pointing toward a stronger recovery from the coronavirus pandemic for the United States than for other countries.

U.S. Treasury yields were pushed down by expectations of lower borrowing to fund economic stimulus measures after Republicans unveiled their counter proposal to President Joe Biden's US$1.9 trillion stimulus plan with less than a third of the funding.

The benchmark 10-year yield was last down 2.5 basis points at 1.0689per cent.

The two-year yield, typically an indication of interest rate expectations, was last at 0.1113per cent and traded as low as 0.107per cent, just above its all-time low of 0.105per cent reached in May.

Brent crude settled up 2.4per cent at US$56.35 a barrel. U.S. crude gained 2.6per cent to US$53.55 as falling inventories and rising fuel demand due to a massive snow storm in the Northeast United States propped up prices.

(Reporting by Imani Moise; editing by Richard Pullin)

Source: Reuters

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