Traders Edge : Tuesday 23 February

Wall Street reversed course late Tuesday, with the S&P 500 and the Dow whipsawing to positive territory by the closing bell in a tug-of-war between stocks that thrived amid lockdowns and those that stand to benefit most from a reopening economy.

Asia

China stocks closed lower in volatile trading on Tuesday, after a sharp correction the previous session, as worries over policy tightening weighed on sectors with lofty valuations, although losses were limited by gains in financials shares.

The blue-chip CS 300 index fell 0.3 per cent to 5,579.67, after logging the biggest daily drop in nearly seven months on Monday. The Shanghai Composite ndex slid 0.2 per cent to 3,636.36.

The Hang Seng Index rose 1 per cent to 30,623.64 at the close, reversing an intraday loss of as much as 0.6 per cent.

Europe

European shares ended lower on Tuesday as high sovereign bond yields pressured heavyweight sectors such as technology, while a batch of mixed corporate earnings cast doubt over the pace of a post-covid-19 recovery.

The benchmark euro zone stock index was down 0.4 per cent, with tech stocks leading declines for a second straight session as they retreated further from 20-year highs.

A recent spike in sovereign bond yields also weighed on stocks, as higher returns in fixed income offered investors a safer alternative to relatively riskier equities.

Technology stocks in particular have also been viewed as expensive by investors after their outperformance through the covid-19 pandemic.

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