Asia’s major stock indexes edged ahead on Tuesday but there was an air of nervousness across trading floors ahead of some key central bank meetings this week.
Shares rose while the dollar drifted lower as investors stayed cautious ahead of a crucial US inflation report later in the day, though there were hopeful signs out of China that more stimulus might be on the way.
Japan’s Nikkei share average notched a modest gain amid waning expectations for an imminent move by the Bank of Japan at its policy meeting next week and Wall Street’s record closing for the year.
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The Nikkei index finished the day up 0.16% at 32,843.70, marking its second consecutive day of gains. It had been up as much as 1.16% at the open but steadily lost ground as the yen strengthened, hurting the earnings outlook for many exporters in the index.
The broader Topix index posted a 0.23% loss for the day, dragged by a higher proportion of finance shares amid concerns about prolonged low-interest rates.
The heavyweight chip companies kept the Nikkei in positive territory, despite 137 of its 225 components falling, versus 86 that rose, with two flat.
Chinese stocks ended higher, led by property and banking shares, amid investor optimism ahead of a top economic meeting, while Hong Kong shares tracked Asian markets higher.
China’s leaders started a closed-door meeting on Monday to discuss economic targets and map out stimulus plans for 2024. The annual Central Economic Work Conference, during which President Xi Jinping and other top officials are expected to chart the course for the world’s second-largest economy next year, is likely to end on Tuesday, sources said.
The blue-chip CSI 300 Index rose 0.21%, bouncing from a near five-year low touched on Monday. The Shanghai Composite Index was up 0.40%, or 12.00 points, to 3,003.44. The Shenzhen Composite Index on China’s second exchange edged up 0.15%, or 2.73 points, to 1,868.10.
In Hong Kong, tech giants climbed 1.7%, and mainland developers listed in the city jumped 5%. The Hang Seng Index gained 1.07%, or 173.01 points, to close at 16,374.50 and the Hang Seng China Enterprises Index advanced 1.48%.
Elsewhere across the region, in earlier trade, Sydney, Seoul, Singapore, Taipei and Jakarta were all in positive territory though Mumbai dropped. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.54%.
Us Dollar Eases
European stock markets were set for a muted open. Eurostoxx 50 futures was up 0.11%, German DAX futures 0.17% higher and FTSE futures up 0.06%.
A slew of economic data along with comments from Fed officials stoked expectations at the start of the month that the Fed would start cutting rates early next year, but investors have since dialled back some of those expectations.
Markets are now pricing in a 48% chance of a rate cut in March compared with 57% a week earlier, according to CME FedWatch tool. Markets, though, have priced in a 75% chance of a cut in May.
In a busy week for central bankers, the European Central Bank, Bank of England, Norges Bank and the Swiss National Bank all meet on Thursday.
The yield on 10-year Treasury notes fell 3.1 basis points to 4.208% after a lacklustre three- and 10-year note auctions on Monday.
Investors were reluctant to buy Treasuries in the auctions given thinner liquidity with the inflation data and the Fed meeting on the horizon this week.
The Treasury Department will sell $21 billion in 30-year reopened bonds on Tuesday, following Monday’s auction of $50 billion in reopened three-year notes and $37 billion in 10-year notes.
In currency markets, the Japanese yen remained in the spotlight as expectations that the Bank of Japan was ready to walk away from its ultra loose monetary policy faded.
The yen strengthened 0.54% to 145.39 per dollar, recouping some of the steep overnight losses. The BOJ is due to meet next week.
The dollar index, which measures the US currency against six rivals including yen, fell 0.135% to 103.92.
Gold prices edged higher after touching a three-week low in the previous session and were last at $1,987.49 an ounce.
US crude rose 0.7% to $71.82 per barrel and Brent was at $76.51, up 0.63% on the day.
Key figures
Tokyo – Nikkei 225 > UP 0.16% at 32,843.70 (close)
Hong Kong – Hang Seng Index > UP 1.07% at 16,374.50 (close)
Shanghai – Composite > UP 0.40% at 3,003.44 (close)
London – FTSE 100 > UP 0.58% at 7,588.40 (0936 GMT)
New York – Dow > UP 0.43% at 36,404.93 (Monday close)
- Reuters with additional editing by Sean O’Meara
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