Asian markets seen firmer after Wall Street turns positive

By Jessica DiNapoli

NEW YORK (Reuters) – Asian markets are expected to swing higher on Thursday, after U.S. stocks reversed course from a three-day losing streak that led the technology-heavy Nasdaq into correction territory.

The U-turn in U.S. stocks, however, was already reflected in some markets, so the impact in Asia may be muted, said Rodrigo Catril, a senior FX strategist at National Australia Bank.

“We still expect markets to open with a positive turn, but we don’t expect a meaningful acceleration of it,” Catril said. “It should be a positive open but not a bombastic open.”

Australian S&P/ASX 200 futures rose 1.28% in early trading and Japan’s Nikkei 225 futures added 0.13%. Hong Kong’s Hang Seng index futures <.hsi> rose 0.85%.

MSCI’s gauge of stocks across the globe <.miwd00000pus> gained 1.44%.

Wall Street ended higher on Wednesday after investors ploughed into technology stocks, taking advantage of the recent dip. Stay-at-home companies such as Facebook Inc and Google-parent Alphabet Inc climbed, while electric-car maker Tesla Inc rebounded nearly 11% after suffering its biggest one-day percentage drop.

The Dow Jones Industrial Average <.dji> rose 439.58 points, or 1.6%, to 27,940.47, the S&P 500 <.spx> gained 67.12 points, or 2.01%, to 3,398.96 and the Nasdaq Composite <.ixic> added 293.87 points, or 2.71%, to 11,141.56.

Oil prices recovered some of the losses they saw in the prior trading session when they hovered near three-month lows.

U.S. crude rose 3.5% and Brent added 2.5%, although COVID-19 outbreaks still threaten to slow a global economic recovery. U.S. crude eased 0.5% in early Asian trade on Thursday to $37.88 a barrel.

Stephen Innes, chief global markets strategist at Australian financial services firm AxiCorp, said in a note that “in the background … continues to be COVID-19 concerns and the delicate balancing act needed to return economies to a new normal and manage the likely rise in cases in the northern hemisphere when social activities move indoors, and (COVID-19) could spread more aggressively.”

The U.S. dollar slid from a four-week high on Wednesday, led by losses against the euro after a report about European Central Bank officials becoming more confident in their outlook for the region’s recovery.

The dollar index fell 0.325%, with the euro up 0.03% to $1.1806.

The safe-haven greenback was also hit by investors’ growing appetite for risk as U.S. stocks rebounded.

U.S. Treasury yields rose on Wednesday after the government sold $35 billion in 10-year notes to slightly soft demand.

(Reporting by Jessica DiNapoli; editing by Richard Pullin)