Asia’s stock indexes returned mixed results on Tuesday with investors unable to shake off the pre-rate hike blues and the ever-deepening global political picture weighing heavily too.
Bargain hunters were the main winners in Tokyo which enjoyed a minor bump, as did mainland China’s bourses thanks to hopes of encouraging economic data but Hong Kong suffered, dragged down by Sino-US tensions.
Japan’s Nikkei share average shed most of its gains but still ended marginally up on Tuesday as investors sold on their outperforming stocks.
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The Nikkei index ended 0.08% higher at 27,445.56, after rising as much as 0.6%. The broader Topix inched up 0.03% to 1,993.28.
Incoming Bank of Japan (BOJ) Governor Kazuo Ueda’s consistent comments on the bank’s easy policy approach to both houses of Parliament also supported investor sentiment, said Yugo Tsuboi, senior strategist at Daiwa Securities.
China stocks finished higher while Hong Kong shares declined as investors shifted their exposure to the A-share market while waiting for economic data confirming a recovery.
That followed figures showing China’s urban employment fell for the first time in six decades last year. Its per capita spending also marked a rare decline, as harsh Covid curbs ravaged the world’s second-biggest economy, official data showed.
Both the Hang Seng Index and the Shanghai Composite posted their first monthly decline in February since November, snapping a three-month rally that began when China started to ease Covid restrictions.
China’s blue-chip CSI 300 Index rose 0.63%, while the Shanghai Composite Index climbed 0.66% or 21.57 points, to 3,279.61.
The Shenzhen Composite Index on China’s second exchange edged up 0.81%, or 17.21 points, to 2,142.08.
The Hang Seng Index dropped 0.79%, or 157.57 points, to 19,785.94, while Hang Seng China Enterprises Index dropped 1.33%.
MSCI’s broadest index of Asia-Pacific shares outside Japan reversed course to trade 0.2% lower at 511.39, pinned near the eight-week low it touched on Monday.
The index was set to end the month down about 7%, which would erase almost all of the gains made in January, when share markets had risen on expectations that major central banks were done with hiking rates.
US Dollar Index Advances
Elsewhere across the region, Sydney, Seoul, Singapore and Wellington were all in the green but Manila, Jakarta, Mumbai and Bangkok slipped.
US stocks had eked out slight gains overnight after last week’s losses – the biggest percentage declines of 2023 for Wall Street’s main benchmarks – as jitters persisted about coming interest rate hikes to tame stubbornly high inflation.
Data on Monday showed US core capital goods orders accelerated in January, beating forecasts, while contracts to buy previously owned US homes rose the most in more than two-and-a-half years in January.
Futures indicated European stocks were set for a subdued start to the day with German DAX futures down 0.05%, FTSE futures down 0.03% and Eurostoxx 50 futures 0.07% lower.
“Investors are now contemplating a scenario of continuing growth and above trend inflation,” said Stephane Monier, chief investment officer at Lombard Odier.
Investors will get more information on the state of the global economy this week, with US ISM manufacturing and services survey data for February due on Wednesday and Friday, respectively. Preliminary euro zone consumer price inflation data for February is due on Thursday.
In the currency market, sterling was last trading at $1.204, down 0.18%, having jumped 1% overnight after Britain struck a new trade deal with the European Union, brightening the outlook for the post-Brexit UK economy.
The dollar index, which measures US currency against six other peers, was up 0.172% at 104.83 and was set to snap a four month losing streak.
US crude rose 0.28% to $75.89 per barrel and Brent was at $82.58, up 0.16% on the day.
Key figures
Tokyo – Nikkei 225 > UP 0.08% at 27,445.56 (close)
Hong Kong – Hang Seng Index < DOWN 0.79% at 19,785.94 (close)
Shanghai – Composite > UP 0.66% at 3,279.61 (close)
London – FTSE 100 < DOWN 0.59% at 7,888.57 (0935 GMT)
New York – Dow > UP 0.22% at 32,889.09 (Monday close)
- Reuters with additional editing by Sean O’Meara
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