Asian shares advanced on Tuesday, lifted by hopes the US Fed might reel back its aggressive interest rates campaign and buoyed by bets China will roll out significant stimulus to boost its struggling economy.
Investors were digesting comments from several Federal Reserve officials on Monday who said while additional rate hikes are needed to bring down inflation, the end to the central bank’s current monetary policy tightening cycle is getting close.
Meanwhile, Beijing extended policy support its the ailing property sector, fuelling hopes for a fresh round of wider easing.
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Across the East China Sea, Japan’s Nikkei share average ended slightly higher, snapping five straight sessions of losses, but the index surrendered most of its early gains as investors sold stocks to lock in profits.
The Nikkei share average edged up 0.04%, or 13.84 points, to close at 32,203.57, while the broader Topix was down 0.31%, or 6.93 points, to 2,236.40.
The yen’s strength against the dollar also prompted investors to sell stocks. The currency rose past 141 per dollar for the first time in nearly a month on Tuesday after those hints from Fed officials over rates finally easing.
China and Hong Kong shares rose too, with Hong Kong-listed China developers jumping as much as 3.2% after China extended until the end of 2024 some support policies to shore up the real estate sector.
The Shanghai Composite Index rose 0.55%, or 17.67 points, to 3,221.37, while the Shenzhen Composite Index on China’s second exchange was ahead 0.79%, or 16.10 points, to 2,052.93.
The Hang Seng Tech Index was up 2.1%, extending a rally triggered by China’s $984 million fine for Ant Group, which could signal the end of a regulatory crackdown on the country’s technology sector. Alibaba shares rose 1.9%, while Tencent gained 1.6%.
The overall Hang Seng Index gained 0.97%, or 180.11 points, to 18,659.83.
Elsewhere across the region, in earlier trade, Sydney, Seoul, Mumbai, Singapore, Taipei, Manila and Jakarta were also up. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.6%.
US Dollar at Two-Month Low
European markets were set for a higher open, with pan-region Euro Stoxx 50 futures up 0.26%, German DAX futures rising 0.37% and FTSE futures down 0.02%. US stock futures, the S&P 500 e-minis, rose 0.07%.
On Monday, US stocks ended higher following last week’s losses and following the Fed officials’ comments.
On Wall Street, the Dow Jones Industrial Average rose 0.62%, the S&P 500 gained 0.24% and the Nasdaq Composite added 0.18%.
S&P 500 company earnings are due to kick off this week with reports from some big US banks. Analysts expect earnings to have fallen 6.4% in the second quarter year-on-year, IBES data from Refinitiv showed.
In US Treasuries, the yield on benchmark 10-year Treasury notes reached 3.9879% compared with its US close of 4.006% on Monday. The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 4.8515% compared with a US close of 4.862%.
The Fed comments knocked the greenback to a two-month low of 101.75 against a basket of currencies in early Asia trade, as investors pared expectations of how much further US interest rates have to rise.
US crude ticked up 0.66% to $73.47 a barrel. Brent crude rose 0.58% to $78.14 per barrel. Gold was slightly higher. Spot gold was traded at $1929.59 per ounce.
Key figures
Tokyo – Nikkei 225 > UP 0.04% at 32,203.57 (close)
Hong Kong – Hang Seng Index > UP 0.97% at 18,659.83 (close)
Shanghai – Composite > UP 0.55% at 3,221.37 (close)
London – FTSE 100 < DOWN 0.23% at 7,526.90 (0934 GMT)
New York – Dow > UP 0.62% at 33,944.40 (Monday close)
- Reuters with additional editing by Sean O’Meara
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