Employees lower the Chinese national flag in front of screens showing the index and stock prices outside Exchange Square in Hong Kong, China, August 18, 2023. Portal/Tyrone Siu/File Photo Acquire LICENSE RIGHTS
SINGAPORE, Oct 24 (Portal) – Asian shares rose slightly on Tuesday, staying just below their lowest level since November 2022, while the dollar fell as traders avoided bets ahead of economic data that is expected to provide clues about the country’s next steps US Federal Reserve will give.
Oil prices recouped some of the previous day’s losses as markets feared the war between Israel and Hamas could escalate into a larger conflict in the oil-exporting region.
MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) pared losses to trade 0.41% higher at 476.72, from the previous level of 472.73, the lowest since November 2022.
With a monthly decline of 3%, the index is in the red for the third month in a row. Japan’s Nikkei (.N225) rose 0.21% after falling as much as 1.4% earlier.
Futures showed European stocks expected to open lower: Eurostoxx 50 futures lost 0.10%, German DAX futures lost 0.11% and FTSE futures lost 0.16%.
“The looming specter of inflation is becoming even more threatening, particularly given the recent sharp rise in oil prices,” said Gary Dugan, chief investment officer at Dalma Capital.
“If oil prices remain at these levels for the remainder of 2023 and into 2024, this could potentially lead to a further spike in inflation in the global economy.”
Investors’ attention this week will be spread across earnings from big-name companies like Microsoft (MSFT.O), Facebook parent Meta Platforms (META.O) and Amazon (AMZN.O), as well as a range of economic data ahead of the Fed- Meeting from October 31st to November 1st.
The U.S. Commerce Department will report third-quarter gross domestic product on Thursday, while the personal consumption expenditures (PCE) report, the Federal Reserve’s preferred measure of inflation, is expected on Friday.
Before that, however, investors will analyze flash Purchasing Managers’ Index (PMI) data from Britain, France, the euro zone and the United States, due out later on Tuesday.
The data deluge precedes central bank meetings over the next two weeks, with the European Central Bank due to meet on Thursday and expected to keep interest rates steady, a Portal poll of 85 analysts shows.
“It is already reasonable to assume that the ECB will not raise interest rates this week as October’s flash PMIs only underline how weak the European economy continues to be,” said Michael Hewson, chief market analyst at CMC Markets in London.
Chinese stocks remained under pressure, with Hong Kong’s Hang Seng Index (.HSI) down 0.68%, although the Shanghai Composite Index (.SSEC) rose 0.32%.
China’s blue-chip CSI300 index (.CSI300) was flat after closing at its lowest level in 4 1/2 years on Monday.
Investor confidence remained weak even after sovereign fund Central Huijin bought exchange-traded funds to support the weakening market.
The yield on the benchmark 10-year U.S. Treasury note rose 0.80 basis point to 4.846% in Asian trading on Tuesday, after falling quickly following a brief rise above 5.0% the previous day.
The rise in yields on the 10-year Treasury note, seen as a safe haven in times of economic uncertainty and a gauge of global borrowing costs, is partly due to investors pricing in stronger U.S. growth.
On Monday, billionaire investor Bill Ackman said he had hedged his earlier bets against government bonds in the expectation that the war between Israel and Hamas would drive more investor money toward U.S. Treasuries.
In the foreign exchange market, the dollar was weak against a basket of currencies after falling 0.5% on Monday. The dollar index was 0.076% lower at 105.52.
The yen remained under pressure but was somewhat relieved by the decline in the dollar.
The Japanese currency was last at 149.74 per dollar after hitting the key 150 level on Friday and Monday, which markets say has the potential to trigger intervention from authorities to support the currency.
In cryptocurrencies, Bitcoin was back in vogue as speculation about the possibility of an exchange-traded fund increased enthusiasm and caused short sellers to exit their positions.
The world’s largest cryptocurrency traded as high as $35,198, hitting an 18-month high, before retreating to $34,427, up 4% on the day.
In commodities, U.S. West Texas Intermediate crude futures rose 0.32% to $85.76 a barrel, while Brent rose 0.33% intraday to $90.13.
Spot gold rose 0.2% to $1,975.49 an ounce.
Editing by Jamie Freed and Clarence Fernandez
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