Asia’s major stock indexes went in different directions on Tuesday with a tech-led surge, impending US inflation data and dip-buying all having an influence on investors.
Also weighing on expectations were bets that the Bank of Japan may be ready to exit its long-standing ultra-easy policy as soon as next week.
That, obviously, impacted mostly on Tokyo’s Nikkei which extended its decline this week, as investors also made adjustments ahead of that US inflation figures release later in the day.
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The Nikkei share average edged down 0.06%, or 22.98 points, to close at 38,797.51, while the broader Topix was behind 0.36%, or 9.59 points, to 2,657.24. It was the second consecutive day of falls for the index, after finishing down 2.2% on Monday.
Tech shares, which have greatly contributed to the Nikkei’s 16% gains so far this year, followed their US peers lower. Chip-making equipment giant Tokyo Electron declined 1.7%, while AI-focused startup investor SoftBank Group was down 0.7%.
Exporter shares also picked up somewhat after the Japanese currency weakened on the BOJ chief’s slightly less optimistic comments on the economy in the Asian afternoon, although automaker Toyota Motor remained down 0.7%.
The yen has recently gained on expectations that the BOJ could exit negative interest rates at its policy meeting on March 18-19.
The central bank’s decision to not make purchases of Japanese exchange-traded funds (ETF) on Monday despite local shares dropping sharply has further stoked speculation that it will soon end its ultra-easy monetary policy.
Mainland China stocks slipped, with some investors booking profits and looking for more policy clues from Beijing, while Hong Kong shares tracked higher.
China’s blue-chip CSI300 Index was ahead 0.23%, but the Shanghai Composite Index lost 0.41%, or 12.52 points, to 3,055.94. The Shenzhen Composite Index on China’s second exchange was up 0.82%, or 14.38 points, to 1,770.57.
Shares in energy slumped 3%, and communications equipment lost 2.2%. However, consumer staples added 2.2% and property developers climbed 1.7%.
In Hong Kong, tech giants jumped 3% and the Hang Seng Index surged 3.05%, or 505.93 points, to 17,093.50, boosted by corporate buy-back bets and property stimulus hopes. The Hang Seng China Enterprises Index climbed 3.49%.
US Inflation Data Release
Elsewhere across the region, in earlier trade, there were also gains in Sydney, Seoul, Mumbai, Singapore, Taipei and Manila. Wellington and Bangkok fell. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8% to its highest in more than seven months.
European bourses were set for a strong open, with the Eurostoxx 50 futures up 0.57%, German DAX futures up 0.57% and FTSE futures 0.74% higher.
Investor focus will be on US inflation data due later on Tuesday, with expectations for a monthly increase of 0.4% and 3.1% on an annual basis.
Core consumer prices are seen rising 0.3%, which would nudge the annual pace down to 3.7%.
Market are all but certain that the US central bank will not cut rates when it meets next week but have priced in more than a 70% chance of a rate cut in June, the CME FedWatch Tool showed. Traders are pricing in 90 basis points of cuts this year.
A stronger majority of economists in the latest Reuters poll also expect the Fed to start cutting rates in June. The survey showed respondents saw it more likely that if Fed policymakers changed their rate projections at the March meeting, the median view would signal fewer cuts this year, not more.
The yield on 10-year Treasury notes eased a bit to 4.094%, while the dollar index, which measures the US currency against six rivals, was little changed at 102.82, having hit a roughly two-month low of 102.33 last week.
Spot gold eased a bit to $2,175.79 an ounce, but was not far from the record high of $2,194.99 it touched last week.
Key figures
Tokyo – Nikkei 225 < DOWN 0.06% at 38,797.51 (close)
Hong Kong – Hang Seng Index > UP 3.05% at 17,093.50 (close)
Shanghai – Composite < DOWN 0.41% at 3,055.94 (close)
London – FTSE 100 > UP 0.89% at 7,737.12 (0933 GMT)
New York – Dow > UP 0.12% at 38,769.66 (Monday close)
- Reuters with additional editing by Sean O’Meara
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