AFP, Hong Kong :
Most markets fell in Asia on Wednesday, hit by profit-taking after a strong rally across the world in recent weeks, with investors worried valuations may have gone too far for now.
However, analysts said that while equities have room for a drop, the general view is that they will resume their strong upward march as vaccine rollouts, slowing infection rates and the easing of lockdowns allow economies to return to normal.
Focus is also on Washington as US lawmakers try to push through Joe Biden’s $1.9 trillion stimulus package, the prospect of which has been a key driver of a months-long surge across global equities.
Bets that the vast spending spurge will give an extra boost to the world’s top economy – and the prospect of business reopenings – have also fired inflation expectations, sending US Treasury yields close to one-year highs.
That has led to concerns about rising borrowing costs, a negative for equity traders.
“The move up in yields has been driven by increasing inflationary concerns amid a rise in energy prices along with the prospect of a big US fiscal stimulus and the global recovery entering a more solid stage as vaccine rollouts lead to the reopening of economies,” said National Australia Bank’s Rodrigo Catril.
