Asian stocks wobbled on Tuesday as investors struggled to maintain recent momentum with uncertainty over the US Fed’s next rates move dampening the mood.
China’s sluggish recovery and continuing Sino-US tensions were also to blame for a choppy day of trading but Japan’s markets were an outlier again, climbing to another 33-year high.
Tokyo’s Nikkei index advanced with this time trading houses and Uniqlo operator Fast Retailing leading the gains on technical support for heavyweight shares ahead of the fixing of special quotation prices.
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The Nikkei recouped from early losses to close 0.90% higher at 32,506.78. The index ended at its highest level since July 1990. The broader Topix rose 0.74% to 2,236.28.
Ahead of the June 9 setting of special quotation prices used to set values on index options and futures, “stocks with a large contribution to the index were speculatively bought, supporting the market,” said Takashi Nakamura, a senior strategist at Tokai Tokyo Research Institute.
Shares of Fast Retailing climbed 1.73%, contributing the most to the Nikkei’s advance, while trading company Mitsui & Co jumped 3.86%.
China stocks retreated, though, despite expectations of more policy easing to aid the country’s stuttering recovery and “candid” talks between senior US and Chinese officials helping soothe geopolitical concerns.
China will likely further cut banks’ reserve ratio and interest rates in the second half of this year to support the economy, the China Securities Journal reported on Tuesday, citing policy advisers and economists.
The Shanghai Composite Index fell 1.15%, or 37.10 points, to 3,195.34, while the Shenzhen Composite Index on China’s second exchange retreated 1.73%, or 35.08 points, to 1,998.62.
Hong Kong-listed mainland property stocks jumped nearly 5% early on, and the CSI 300 Real Estate Index rose 1.5%, as investors clung to hopes that Beijing would roll out supportive measures soon to bolster the embattled sector.
But that didn’t help the benchmark Hang Seng which dropped 0.05%, or 9.22 points, to 19,099.28.The Hang Seng China Enterprises Index climbed 0.24%.
Elsewhere across the region, in earlier trade, there were also losses in Sydney, Singapore, Manila and Mumbai. But Taipei, Wellington, Bangkok and Jakarta were in the green.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.17% higher, shrugging off earlier losses.
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Futures indicated European stocks were set for a muted open, with Eurostoxx 50 futures down 0.05%, German DAX futures off 0.06% and FTSE futures losing 0.04%.
A string of economic data along with last week’s dovish rhetoric from Fed officials has emboldened bets of the Fed refraining from an interest rate hike at its June 13-14 meeting.
Markets are now pricing in an 82% chance of the Fed standing still, a sharp jump from a 36% chance a week earlier, according to the CME FedWatch tool.
Data overnight showed that the US services sector barely grew in May as new orders slowed, pushing a measure of prices paid by businesses for input to a three-year low, which could aid the Fed’s fight against inflation. The services industry accounts for more than two-thirds of the US economy.
Data on Friday showed US non-farm payrolls rose by 339,000 jobs in May but a surge in the unemployment rate to a seven-month high of 3.7% suggested an easing in labour market conditions.
In oil markets, prices eased to give up most gains from the previous session after the world’s top exporter, Saudi Arabia, said that it would further cut output. US crude fell 0.26% to $71.96 per barrel and Brent was at $76.58, down 0.17% on the day.
In the currency market, the dollar index , which measures the greenback against six major peers, fell 0.144%, with the euro up 0.12% to $1.0725.
The yen weakened 0.10% to 139.44 per dollar, while sterling was last fetching $1.2448, up 0.09% on the day.
In cryptocurrencies, bitcoin was last at $25,780, having slid over 5% overnight after the US securities regulator sued crypto exchange Binance, in another blow to the industry.
Key figures
Tokyo – Nikkei 225 > UP 0.90% at 32,506.78 (close)
Hong Kong – Hang Seng Index < DOWN 0.05% at 19,099.28 (close)
Shanghai – Composite < DOWN 1.15% at 3,195.34 (close)
London – FTSE 100 < DOWN 0.40% at 7,569.95 (0933 GMT)
New York – Dow < DOWN 0.59% at 33,562.86 (Monday close)
- Reuters with additional editing by Sean O’Meara
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