Asia’s major stock indexes were on the front foot on Tuesday with investor mood lifted by an overnight Wall Street rally and Beijing’s latest market interventions.
Japan’s Nikkei share average again rose to a 34-year peak, buoyed by New York’s climb to a fresh record high and the Bank of Japan’s (BOJ) decision to keep ultra-easy policy settings intact.
The Nikkei rallied as much as 1.2% to 36,984.51, a level not seen since February 1990, before a wave of selling as traders locked in gains following a world-beating surge so far this year.
Japan’s benchmark index closed 0.08% lower at 36,517.57, putting its gains for 2024 at 9.12%. It stands head and shoulders above major global peers, many of which are negative for the year. The broader Topix was behind 0.11%, or 2.85 points, to 2,542.07.
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Technical indicators have been flashing red, and analysts have been warning daily that a Nikkei pullback is likely. The relative strength index (RSI) still stands at 75.7, well above the 70 line that signals overbought conditions.
China stocks edged ahead, hovering near a five-year low hit in the previous session, while Hong Kong shares rallied after the country’s cabinet pledged to take more effective measures to stabilise market confidence.
The cabinet meeting, chaired by Premier Li Qiang, said on Monday it will step up medium- and long-term fund injections in the capital market to strengthen stability as well as promote healthy development.
Still, the Shanghai Composite Index remained below the psychologically key 2,800-point mark, and the CSI300 gave up most if its early gains, highlighting extremely fragile investor sentiment as the Chinese economy sputters and authorities appear reluctant to release major stimulus.
The blue-chip CSI 300 Index ended 0.40% ahead, while the Shanghai Composite Index rose 0.53%, or 14.64 points, to 2,770.98. The Shenzhen Composite Index on China’s second exchange was up 0.95%, or 15.33 points, to 1,626.60.
The Hang Seng Index bounced back after Monday’s slump to gain 2.63%, or 392.80 points, and end at 15,353.98.
Elsewhere across the region, in earlier trade, Sydney, Seoul, Singapore, Wellington, Taipei and Manila were also up but Mumbai dropped. The MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9%.
US Treasury Yields Steady
European markets were likely to open mostly flat, with Eurostoxx 50 futures up 0.1%. S&P 500 futures were flat although Nasdaq futures gained 0.1%.
Investors are waiting for earnings from Netflix after the close and expectations are generally upbeat. Also due is GE, with JPMorgan looking for earnings to beat the Street’s forecasts.
Traders have pared back their expectations for the timing of the first interest rate cut from the Federal Reserve, with the probability for March at just 40% now. However, they still see about five rate cuts this year.
The European Central Bank (ECB) meets on Thursday and is expected to hold monetary policy steady.
In the currency markets, the Australian dollar and the kiwi dollar – liquid proxies for China’s yuan – each gained 0.5% thanks to the talk about stock market support measures from Beijing.
US Treasury yields were steady after dipping overnight as investors took advantage of a decline in bond prices to enter the market. The 10-year were little changed at 4.0957%, while the two-year yield held at 4.3825%.
Oil prices were mostly steady on Tuesday after surging 2% overnight as a Ukrainian drone strike on Russia’s Novatek fuel terminal caused supply disruptions.
US crude futures were flat at $74.73 per barrel after climbing 2.4% overnight to a one-month top of $75.75 and Brent futures slipped 0.1% to $80.00.
Key figures
Tokyo – Nikkei 225 < DOWN 0.08% at 36,517.57 (close)
Hong Kong – Hang Seng Index > UP 2.63% at 15,353.98 (close)
Shanghai – Composite > UP 0.53% at 2,770.98 (close)
London – FTSE 100 < DOWN 0.03% at 7,485.41 (0936 GMT)
New York – Dow > UP 0.36% at 38,001.81 (Monday close)
- Reuters with additional editing by Sean O’Meara
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