A man stands on an overpass with an electronic board showing Shanghai and Shenzhen stock indexes in Shanghai. Photo: Reuters
Asian shares rallied on Tuesday, lifted by hopes of the US Fed easing up on its aggressive rate hikes, strong earnings from some big players and rumours of a relaxation of Covid curbs in China.
Most stocks and currencies across the region were in the green as investor sentiment firmed ahead of the outcome of the US Federal Reserve’s policy meeting, but gains were limited by the weak Chinese yuan which hit its lowest level in 15 years.
Japanese shares ended higher, with investors buoyed by some companies’ strong outlooks, even as shares of Toyota Motor fell after posting a worse-than-expected earnings.
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The benchmark Nikkei 225 index rose 0.33%, or 91.46 points to end at 27,678.92. The broader Topix index gained 0.47%, or 9.07 points, to 1,938.50.
Toyota fell 1.94% and weighed on the Nikkei after reporting a 25% drop in September quarter profit and cut its annual output target, as the automaker battles surging material costs and a persistent semiconductor shortage.
But Japan Tobacco jumped 8.7% and was the top gainer on the Nikkei, after the cigarette and drink maker raised its annual profit forecast.
Panasonic Holdings climbed 7.3% despite posting an 11% drop in second-quarter operating profit, as the conglomerate performed better than analysts’ estimates.
Investors, though, remained cautious waiting on the outcome of the US Federal Reserve policy meeting on Tuesday and Wednesday.
The US central bank is all but certain to raise interest rates by 75 basis points, but investors will be looking for any signals the Fed may be considering a slowdown in its future interest rate hikes.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.7%, largely thanks to the rebound of Hong Kong and mainland China stocks.
They jumped on rumours circulating on social media that Beijing was planning a reopening from strict Covid curbs in March, triggering a sharp rebound following last month’s savage selling.
A Chinese foreign ministry spokesman later said he was unaware of the situation.
The Hang Seng Index advanced 5.2%, or 768.25 points, to 15,455.27, while the Hang Seng Tech Index gained nearly 8%.
China’s benchmark CSI300 Index rose 3.4% as the Shanghai Composite Index gained 2.6%, or 75.72 points, to 2,969.20. The Shenzhen Composite Index on China’s second exchange rallied close to 3%, or 55.94 points, to 1,942.36.
Elsewhere across the region, Singapore stocks rose 0.9%, hitting a near one-month high and the Thai benchmark gained 0.4% to mark its best day in two weeks.
Indian stocks gained too with Mumbai’s signature Nifty 50 index up 0.7%, or 129.90 points, at 18,142.10.
Globally, apart from the Fed’s rate decision, markets are also focused on US jobs data on Friday and Chinese economic activity data this week.
US Treasury yields eased slightly across the curve with the two-year yield – which rises with traders’ expectations of higher Fed fund rates – touching 4.4555% compared with a US close of 4.501% on Monday.
The yield on benchmark 10-year Treasury notes stood at 4.0274% compared with its US close of 4.077%.
In currencies, the dollar was firm against the struggling Japanese yen to 148.34 yen and rose to $0.991 per euro.
China’s yuan hit a near 15-year low against the dollar on Tuesday, after the central bank fixed the official guidance rate at its lowest level since the global financial crisis of 2008.
The onshore yuan in afternoon trade reversed losses and bounced to a high of 7.26 per dollar.
In the energy market, oil prices recovered some losses from the morning session with US crude up 0.8% to $87.22 a barrel. Brent crude rose to $93.67 per barrel.
Tokyo – Nikkei 225 > UP 0.3% at 27,678.92 (close)
Hong Kong – Hang Seng Index > UP 5.2% at 15,455.27 (close)
Shanghai – Composite > UP 2.62% at 2,969.20 (close)
London – FTSE 100 > UP 1.4% at 7,194.36 (0945 GMT)
New York – Dow < DOWN 0.4% at 32,732.95 (Monday close)
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