Asia’s major markets bounced back on Tuesday after an extended slump as bargain buyers moved in and investors were buoyed by rising US futures.
The MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.3% and was set for its best day in around two weeks with markets pausing to reassess the growth outlook after last week’s Fed rate hike.
Japan’s Nikkei rebounded strongly from a three-month low on Tuesday, as investors cheered the rise in US stock futures and scooped up beaten-down cyclical shares.
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The Nikkei stock average ended the day up 1.84% at 26,246.31, after gaining as much as 2.5% during the session. At the start of the week, the benchmark index had dipped to a low of 25,520.23 for the first time since March 16. The broader Topix advanced 2.05% to 1,856.20.
Tech had several big winners in Tokyo. The Sony Group jumped 3.99%, while startup investor SoftBank Group advanced 2.88%, but the best-performing sector on the Nikkei was energy, which rallied 3.74% amid higher crude oil prices.
“You can call this a rebound in an oversold market but the speed of the gains is creating some panic among the people who sold at the bottom,” said a market participant at a domestic securities company.
Across the water, Chinese shares had a mixed day, with Hong Kong advancing, but mainland equities in reverse.
Tech names were among the leaders there too with Hong Kong-listed firms up 1.9% and the Hang Seng Index gained 1.87%, or 395.68 points, to 21,559.59.
The Shanghai Composite Index though dipped 0.26%, or 8.71 points, to 3,306.72, while the Shenzhen Composite Index on China’s second exchange dropped 0.51%, or 11.04 points, to 2,147.29.
Mumbai’s Nifty 50 Gains
Elsewhere across the region, markets recovered some of their recent losses and an index tracking Asian emerging markets inched higher from a five-week low.
Equities in Malaysia, Thailand, Singapore and Indonesia rose between 0.7% and 0.8%, while those in South Korea and India were up as well. Mumbai’s signature Nifty 50 index was up 2.20%, or 338.05 points, at 15,688.20.
Globally, stocks recovered too and the safe-haven dollar edged down as investors paused for breath after a steep sell-off over the last few weeks, but concerns remain about aggressive central bank interest rate hikes and risks of a global recession.
US markets, which were closed on Monday for a holiday, looked set for a bigger pop at the open with S&P 500 e-mini share futures 1.63% higher and Nasdaq e-mini share futures advancing 1.76%.
Central banks around the world are looking to raise interest rates aggressively to curb rising inflation, a sentiment underscored on Tuesday by Reserve Bank of Australia Governor Philip Lowe, who pointed in a speech to further rate hikes.
Australia’s S&P/ASX 200 index climbed 1.45% and the Aussie dollar was little changed.
Fed, Bank of England Clues
Continuing the central bank theme, two Federal Reserve policy-makers are due to speak later in the day, as are two speakers from the Bank of England. Traders will follow their remarks closely for clues about the interest rate trajectory.
In currency markets, the dollar index, which tracks the greenback against a basket of its peers, edged down a little in line with the improved risk sentiment to 104.37, as the dollar lost a modicum of ground on the euro.
The Japanese yen remained under pressure at 135.1 yen per dollar, not far off a 24-year low of 135.58 yen hit early last week.
In bond markets, the yield on US benchmark 10-year treasury notes was 3.2825%, up from last Friday’s close of 3.2313.
Last week’s peak of 3.495% was the 10-year yield’s highest since 2011 and came the same day the Fed raised interest rates by a massive 75 basis points.
Oil Swings Higher
Oil prices swung higher with traders focusing on tight supplies over slowing global economic growth. US crude rose 1.79% to $111.52 per barrel and Brent was at $115.47, up 1.17% on the day.
The United States is in talks with Canada and other allies globally to further restrict Moscow’s energy revenue by imposing a price cap on Russian oil without causing spillover effects to low-income countries, Treasury Secretary Janet Yellen said on Monday.
Bitcoin was at $20,629 having failed to break strongly above or below the psychologically significant $20,000 level in recent days.
Key figures
Tokyo – Nikkei 225 > UP 1.84% at 26,246.31 (close)
Hong Kong – Hang Seng Index > UP 1.87% at 21,559.59 (close)
Shanghai – Composite < DOWN 0.26% at 3,306.72 (close)
New York – Dow < DOWN 0.13% at 29,888.78 (Friday close)
- Reuters with additional editing by Sean O’Meara
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