A woman walks past a man examining an electronic board showing Japan’s Nikkei average and stock prices outside a brokerage firm, in Tokyo, Japan, March 20, 2023. Portal/Androniki Christodoulou/File Photo ACKNOWLEDGE RIGHTS
HONG KONG, Oct 10 (Portal) – Asian stocks rose on Tuesday as bond yields fell, helped by dovish comments from the U.S. Federal Reserve and a decline in oil prices after Monday’s rise, but markets remained subdued amid the violence East carefully.
Markets in Europe and the US are also expected to open higher, with FTSE futures up 0.78% and e-mini futures for the S&P 500 index up 0.07% at 0504 GMT.
MSCI’s index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) pared morning gains to a 0.81% gain.
Senior Fed officials suggested on Monday that rising Treasury yields could deter the central bank from raising interest rates further, which could contribute to a rise in bond prices after those markets closed in the U.S. and Tokyo the previous day.
A range of economic and trade data is due to be released next week, including inflation in the US and credit and trade data from China.
However, markets are closely monitoring military clashes between Israel and the Palestinian Islamist group Hamas after hundreds of Israelis were killed in a surprise attack by Hamas on Saturday.
The Israeli military has since said it had called up 300,000 reservists and imposed a total blockade of Gaza, raising expectations of a possible ground attack.
“It’s still fairly early to assess the meaningful impact of what’s happening in the Middle East and what it actually means for markets,” said Kerry Craig, a global market strategist at JPMorgan Asset Management.
“If it goes on for a longer period of time and we involve more players, that will obviously have a greater impact on the market.”
Japan’s benchmark Nikkei Average (.N225) rose 2.5%, while Australia’s S&P/ASX 200 (.AXJO) closed up 0.7%, both led by energy stocks.
China’s blue-chip CSI 300 index (.CSI300) fell 0.58% as investors rushed to sell companies with exposure to the Middle East. However, the Hang Seng Index (.HSI) rose 1.1%.
China’s largest private real estate developer Country Garden Holdings (2007.HK) warned that it may be unable to meet all of its offshore payment obligations when due or within the relevant payment terms, weighing on the country’s struggling real estate sector.
U.S. stocks closed higher on Monday, with energy stocks rising along with oil prices. The S&P 500 Energy Index (.SPNY) rose 3.5%.
Markets’ initial reaction to developments in the Middle East was a bout of risk aversion, National Bank of Australia analysts said in a note.
“Nevertheless, it is interesting to note that the extent of measures was relatively limited and in many cases not all measures were maintained,” they said.
Oil prices fell after rising more than 4% on Monday. Brent crude fell 0.44% to $87.76 a barrel at 0535 GMT, while U.S. West Texas Intermediate crude fell 0.49% to $85.96 a barrel.
“The near-term turmoil and volatility suggest upside risks to oil prices will persist,” OCBC economists said in a note.
“Our base case assumes that tensions in Gaza and Israel may remain limited even if the conflict continues for a longer period of time. This will lead to some volatility in oil prices during periods of intense conflict, but is likely to lead to a normalization of prices after the knee-jerk crisis. “Reaction.”
Spot gold gave up earlier gains to settle around $1,860.6 an ounce after hitting a weekly high on Monday as investors sought safe havens.
The dollar fell on Tuesday along with US interest rate expectations. Asian currencies are falling slightly.
Ten-year Treasury yields, which have risen sharply, fell 12 basis points to 4.67%.
(This story has been corrected in paragraph 21 to say that the 10-year Treasury yield fell 12 basis points to 4.67%, not 2 basis points to 3.35%.)
Reporting by Kane Wu in Hong Kong; Additional reporting by Stella Qiu in Sydney; Edited by Edmund Klamanhn and Kim Coghill
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