Asia’s major markets enjoyed a mostly positive day on Tuesday but investors were distracted by key US inflation data due later in the week.
The region’s markets shifted higher in early trade thanks to bargain-buying and following Friday’s bigger-than-expected surge in US jobs for January, which reassured traders of the state of the economic recovery.
But the big event looming is the inflation reading – to be announced on Thursday – that is tipped to see another painful rise in prices for last month, having come in at a four-decade high in December.
The spike has forced central banks around the world to wind back the ultra-loose monetary policies put in place two years ago to guard against the economic impact of Covid-19 and, while many have lifted rates already, all eyes are on the Fed’s first move in March.
While US finance chiefs have not given a timetable for their increases, speculation is swirling over how many it will announce this year – with forecasts ranging from three to seven – and by how much.
That uncertainty has weighed on global markets this year and commentators have warned further turbulence is to be expected.
However, a feeling that recent selling may have been overdone has attracted some investors back into the fray.
On Tuesday, Tokyo was in positive territory helped by news that the United States will ease tariffs on steel imported from Japan that were imposed by Donald Trump, while Sydney, Singapore, Seoul, Mumbai, Wellington, Bangkok, Taipei and Manila were also up.
The benchmark Nikkei 225 index ended up 0.13%, or 35.65 points, at 27,284.52 while the broader Topix index was up 0.42%, or 8.07 points, at 1,934.06 at the close.
But Hong Kong dropped with already-troubled Alibaba under pressure from reports that major shareholder SoftBank was planning to offload at least a part of its huge stake in the firm.
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The Hang Seng Index fell 1.02%, or 250.06 points, to 24,329.49. The Shanghai Composite Index added 0.67%, or 23.05 points, to 3,452.63, while the Shenzhen Composite Index on China’s second exchange slipped 0.24%, or 5.48 points, to 2,280.51.
Jakarta was also slightly lower. London and Frankfurt opened higher but Paris edged down.
Traders are also keeping a close eye on events on the Ukraine border as Russia masses its troops, with Western nations warning it is planning an invasion.
The threat of war has kept upward pressure on oil prices in recent weeks, though the main driver has been expectations for a surge in demand owing to economic reopenings, tight supplies and a cold snap in the United States.
And OANDA’s Edward Moya said signs of progress in US-Iran nuclear talks, which could see Tehran sell internationally again, would likely not have much long-term impact on the rally towards $100 a barrel.
Both main contracts were slightly lower on Tuesday but remain around highs not seen since 2014.
Key figures around 0820 GMT
Tokyo > Nikkei 225: UP 0.1% at 27,284.52 (close)
Hong Kong > Hang Seng Index: DOWN 1.0% at 24,329.49 (close)
Shanghai > Composite: UP 0.7% at 3,452.63 (close)
London > FTSE 100: UP 0.3% at 7,593.54
New York > Dow: FLAT at 35,091.13 (Friday close)
- AFP with additional editing by Sean O’Meara