Asian markets ended the first quarter on a positive note, as investors shrugged off concerns about rising COVID-19 cases and tighter lockdowns in some countries and focused on the prospects of a global economic recovery. The Federal Reserve’s dovish tone after its latest rate hike also boosted sentiment, as it signaled a more gradual and cautious approach to monetary policy normalization. The Bank of England is expected to tighten policy further later in the day.
Among the major indices, Australia’s S&P/ASX 200 added 1.0%. The index was lifted by gains in energy, materials and financials sectors, as commodity prices remained elevated and bank stocks recovered from recent losses. South Korea’s Kospi rose 0.7%, Hong Kong’s Hang Seng gained 0.6%, and China’s Shanghai Composite advanced 0.7%. Japan’s Nikkei 225 was the only laggard, shedding 0.4%. The index was weighed down by concerns about Japan’s slow vaccination rollout and rising COVID-19 infections, which prompted some local governments to impose stricter measures to curb the spread of the virus. The index was also pressured by a stronger yen, which appreciated against the US dollar, as investors sought safety amid global market volatility.
In commodities, gold firmed up above $1,970 an ounce, as the Fed’s dovish tone boosted its appeal as a hedge against inflation and currency weakness. Crude oil fell below $70 a barrel, as rising US inventories and OPEC+ supply weighed on the market. The US dollar index, which measures the greenback against a basket of six major currencies, slipped to 91.8, as investors pared back their expectations for more rate hikes this year.