Asian stocks tumbled Tuesday after two Fed officials made hawkish comments overnight, with investors cautious ahead of key inflation data and fears of COVID-19. Commodities rose as China resumed economic activity following restrictions.
MSCI’s broadest index of non-Japanese Asia-Pacific stocks was flat in early trade.
“Last night’s main theme was cautiousness in the stock market as equities capped the rally after two Fed officials’ hawkish remarks,” Commerzbank said in a memo to clients. “Rafael Bostic and Mary Daily say Fed likely to hike rates [interest] Raise the interest rate to 5% and let it stay there for a while. ”
The S&The P500 index started the week on a bullish tone, rising more than 1.4% early in US trading on Monday, but gave up all its gains and closed slightly lower.
US dollar and Treasury yields continued to come under pressure, with the US 10-year Treasury yield on Tuesday rising 1.14 basis points to 3.5284% from 3.517% late Monday. The dollar index fell 0.1%.
Mizuho Bank said in a report that “sentiment became more cautious ahead of Thursday’s US CPI (consumer price index) release, citing the ‘risks’ of trading that was launched as a result of optimism over China’s reopening. It can weaken,” he said.
Atlanta Fed President Raphael Bostic said if U.S. consumer price data confirmed the cooling seen in the most recent monthly jobs report, he would “take the quarter-point rise more seriously and move in that direction.” ‘ said there is a need.
China’s reopening boosted sentiment as stocks rose for a sixth consecutive time on Monday, with Hong Kong stocks jumping to a six-month high. But any optimism may be short-lived, said Trinh Nguyen, Emerging Asia economist at Natixis in Hong Kong.
“I think it’s actually the reality of this opening that mitigates much of this optimism. Even Hong Kong, although officially open, has been quite slow in issuing visas,” Nguyen said. rice field.
China’s benchmark fell 0.21% on Tuesday while Hong Kong’s Hang Seng Index fell 0.85%.
Copper prices rose as top consumer China improved its post-reopening demand outlook, while zinc rose 5% to its highest since December 15.
Japan’s Nikkei Stock Average rose 0.57%, bucking regional trends.
Core consumer prices in Tokyo rose 4.0% earlier than expected in December, announced Tuesday, prompting the Bank of Japan to phase out massive stimulus as it tweaks yield curve control policies. It supported market expectations of potential.
In Australia, shares fell 0.19% in early trading.
Oil prices were little changed on Tuesday as traders waited for clarification on a rate hike. US crude fell 0.07% to $74.58 a barrel while Brent fell 0.18% to $79.51.
Gold prices edged higher, gaining 0.1% to $1,872.66 an ounce.