Asian investors were in cautious mood again on Tuesday with trading subdued amid the continuing gloomy global picture and more signs of China’s bumpy recovery.
Japan was an outlier among the region’s major markets with the Nikkei index touching its highest level in eight months, led by electronics makers on earnings optimism and expanded government subsidies for chip production.
Shares, though, lost momentum in the afternoon session, weighed down by their steel producers amid signs of weakening Chinese demand.
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The Nikkei added 0.09% to close at 28,620.07, advancing for a second straight session. In early trading, the gauge jumped as much as 0.75% to 28,806.69, the highest since August 19, 2022. The broader Topix rose 0.24% to 2,042.15.
Chip stocks were buoyed after Industry Minister Yasutoshi Nishimura said Japan plans to give additional subsidies to chipmaker Rapidus, which is looking to build a cutting-edge factory on the northern island of Hokkaido.
But China stocks fell for a fifth straight session, after data showed the country’s economic recovery remained uneven, while investors were also worried about lingering geopolitical risks.
Meanwhile, China has reportedly nudged its banks this month to cut deposit interest rates further, in Beijing’s latest effort to channel the country’s vast savings pool into spending and more productive investments.
The Shanghai Composite Index fell 0.32%, or 10.54 points, to 3,264.87, while the Shenzhen Composite Index on China’s second exchange slipped 1.69%, or 34.61 points, to 2,014.58.
The market was also concerned about US restrictions on technology investments, analysts said. The Hang Seng Index dropped 1.71%, or 342.06 points, to 19,617.88.
Elsewhere across the region, in early trade, Manila, Bangkok and Singapore also sank, while Wellington, Mumbai and Jakarta rose. Kuala Lumpur was more or less flat.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.2% by 0510 GMT.
Microsoft, Tesla Earnings Results
Globally, stocks fell broadly and the US dollar also weakened early on, reflecting investors’ uncertainty in a busy week for corporate earnings and economic data.
In early European trades, the pan-region Euro Stoxx 50 futures were down 0.3%. German DAX futures and FTSE futures fell 0.2% and 0.3% respectively.
On Monday, the Nasdaq closed lower, underperforming the S&P 500 and the Dow, with pressure from high-profile megacaps as investors awaited results from companies including Microsoft, while Tesla shares fell on concerns about its spending plans.
Troubled US bank First Republic Bank shares sank more than 20% after the closing bell on Monday as it said deposits plunged by more than $100 billion in the first quarter and it was exploring options such as restructuring its balance sheet.
Meanwhile, Swiss banking giant UBS Group reported a 52% slide in quarterly profit, as it prepares to integrate fallen rival Credit Suisse. The drop in profit was largely due to UBS setting aside a further $665 million to cover the costs of toxic mortgages that played a central role in the global financial crisis some 15 years ago.
US Treasury Yields Drop
Market participants are waiting for corporate earnings and a mix of economic data from the US, Europe and China for cues on the growth momentum and when a recession in the US economy might start.
In the US treasury market, yields fell as participants looked for less risky places to park cash amid concerns over the approaching US debt ceiling deadline, with the House of Representatives expected to vote on a Republican-led debt and spending bill this week.
Benchmark 10-year notes edged down to 3.4749% by 0511 GMT, after strengthening on Monday to 3.5034%.
The dollar index was almost flat by 0510 GMT, paring some earlier losses. Gold gave up some gains. Spot gold was traded at $1991.39 per ounce.
Oil prices were steady. Brent crude edged up 4 cents $82.70 a barrel by 0506 GMT, while US West Texas Intermediate crude edged up to $78.73 a barrel.
Key figures
Tokyo – Nikkei 225 > UP 0.09% at 28,620.07 (close)
Hong Kong – Hang Seng Index < DOWN 1.71% at 19,617.88 (close)
Shanghai – Composite < DOWN 0.32% at 3,264.87 (close)
London – FTSE 100 < DOWN 0.28% at 7,889.96 (0935 GMT)
New York – Dow > UP 0.20% at 33,875.40 (Monday close)
- Reuters with additional editing by Sean O’Meara
Read more:
China Asks Banks to Cut Deposit Rates Again to Boost Spending
Bank of Japan to Hold Firm on Ultra-Easy Policy: Economists
