Thursday, July 25, 2024

Asia shares fall on hawkish Fed comments; Recession risks weigh on commodities, oil

HONG KONG, Jan 10 (Reuters) – Asian stocks fell on Tuesday, with recent gains pared by China’s reopening and oil trading lower overnight following dovish comments from two U.S. Federal Reserve officials.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) decreased by 0.17%.

“The key overnight theme was caution in the equity space as stocks gained after dovish comments from two Fed officials. Rafael Bostick and Mary Daly said the central bank could raise (interest) rates above 5% and keep them there for some time,” Commerzbank said in a client note. Said.

S&P500 index (.SPX) It started the week on a positive note with a rise of more than 1.4% in early US trade on Monday, before giving up all gains to close a touch lower.

U.S. Treasuries and the U.S. dollar were under pressure, with the yield on U.S. 10-year notes rising 2.23 basis points to 3.5393% on Tuesday from 3.517% late Monday.

The dollar index was flat.

“Sentiment is likely to turn more cautious ahead of the US CPI (Consumer Price Index) release on Thursday, which will reduce the ‘risk on’ trade initiated as a result of hopes for China’s reopening,” Mizuho Bank said in a note.

If U.S. consumer price data confirms the cooling seen in the latest monthly jobs report, Atlanta Fed President Bostick said a quarter-point increase would have to be taken “more aggressively and to move in that direction.” read more

China shares hit a six-session winning streak on Tuesday, while Hong Kong shares rose to a six-month high. However, any optimism may be short-lived, said Trinh Nguyen, emerging Asia economist at Natixis in Hong Kong.

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“I think what drives the strength of this optimism is really the reality of this opening. Even in Hong Kong, even though it’s officially open, visa issuance is very slow,” Nguyen said.

China scale (.CSI300) Gained 0.15% from earlier losses, while losses on Hong Kong’s Hang Seng Index (.his) down to 0.15%.

Prices of most base metals slipped on Tuesday from recent rallies driven by the reopening of top consumer China, as traders weighed the risks of a global economic slowdown and weaker consumption.

Three-month copper on the London Metal Exchange was down 0.8% at $8,786 a tonne by 0422 GMT. Copper prices touched a more than six-month high on Monday, while zinc rose 5% on Monday to its highest level since December 15.

Nikkei of Japan (.N225) Up 0.35%, bucking the regional trend.

Tokyo’s core consumer prices, released on Tuesday, rose a faster-than-expected 4.0% in December, confirming market expectations that the Bank of Japan may ease its massive stimulus by reversing its yield curve tightening policy. read more

In Australia, stocks (.AXJO) 0.28% lost.

Oil prices fell on Tuesday on expectations of a further Fed rate hike. read more

US crude was down 0.5% at $74.26 a barrel, while Brent was down 0.56% at $79.20.

Gold prices rose, gaining 0.15% to $1,872.70 an ounce.

E-mini futures for the S&P 500 indicated a dull open with a 0.17% decline.

Report by Selena Li; Editing by Muralikumar Anantharaman

Our Standards: Thomson Reuters Trust Principles.

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