Kevin Buckland

TOKYO (Reuters) – Tech stocks climbed in Asia on Friday, following U.S. peers higher, while Chinese property stocks rallied following a surprise interest payment https://www.reuters.com/world/china/china-evergrande-sends-funds-trustee-bond-coupon-due-sept-23-source-2021-10-22 by debt-ridden property developer China Evergrande Group.

In the meantime, cyclical stocks were dragging amid fears that central bankers would need to tighten monetary control to slow growth to address persistent inflation.

The yields on regional bonds rose along with U.S. Treasuries’. This was because the market price in higher inflation through narrowing the spread between long-term and short-term yields and pushing breakeven rate to their highest level since 2012.

As better job and housing data supported the case for an earlier tapering of Federal Reserve stimuli and faster interest rate rises, the dollar maintained gains overnight.

The technology shares led the increase of 0.7%, with energy shares being the largest drag. With a 0.6% increase in Topix’s growth index, the broader grew 0.3%. This was more than the 0.1% gain for the value index.

Chinese blue chips saw 0.3% growth, while the CSI300 Real Estate Index grew 2.5%. Hong Kong’s index which tracks mainland developers listed in Hong Kong rose 4.3%.

Australia’s benchmark index lost 0.2% because of falling commodity-linked stocks.

China Evergrande Group wired funds on Thursday to a trustee bank account for a dollar bond interest payments due Sept. 23, according to Reuters. The deadline would have put the troubled developer in formal default. Stock rose 5.4%.

MSCI’s Asia-Pacific broadest index, which excludes Japan, fell 0.1%.

E-minis futures fell 0.1% overnight after E-minis posted an unprecedented closing high, fueled by tech shares.

The S&P 500 added 0.3%, while the rallied 0.6%, although the edged slightly lower.

Nearly all of the FAANG companies will report their earnings next week: Alphabet, Amazon (NASDAQ) and Facebook (NASDAQ). Netflix (NASDAQ:), posted its quarterly results on October 19. The diluted earnings per share for September’s quarter was $3.19. This beat analyst expectations of $2.57.

According to Kyle Rodda (a market analyst at IG Australia), “The last few days have been earnings-focused and tech stocks lead the charge.” There’s momentum, plain and simple.

However, he stated that inflation concerns and growth worries have led to speculations that the central banks may raise interest rates. The possibility of crimping growth is particularly concerning for cyclical shares.

In spite of tightening U.S. stock, oil prices rebounded on Friday after falling to multi-year lows.

U.S. West Texas Intermediate crude increased 0.2% to $84.77 and 0.2% at $82.65.

Last week’s data shows that Americans filed fewer claims for unemployment benefits than usual, dropping to 19.3 million in the overnight period. This indicates a tighter labor market.

Benchmark yields were close to the overnight high of 1.79222%. Close to the overnight record of 0.4560% were yields on two-year bonds at 0.484%, which is a new high not reached since March 2013.

The was flat at 93.730 Friday. This maintained the 0.2% increase in the previous session.

Fed signaled that they could begin to withdraw stimulus by next month. The Fed will then increase rates later in the year.

Jerome Powell, Fed Chair, speaks in a panel discussion later Friday.