Hong Kong, May 17 (BNA): Asian shares rose on Tuesday despite the data bolstering investor fears that the global economic recovery may be more fragile than expected, even as inflationary pressures continue to rise.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.84% on Tuesday, but still lower, the index is down 6.7% so far this month. US stocks ended the previous session with slight losses, Reuters reports.
In Tokyo, the Nikkei was flat in early trade, while the S&P/ASX200 in Australia was up 0.34%.
Hong Kong’s Hang Seng Index is up 1.2% and mainland China’s CSI300 Index is up 0.07%.
The US dollar index, which measures the US currency against a basket of the currencies of other major trading partners, settled in Asian trade at 104.1.
Economic growth concerns in the world’s two largest economies have resurfaced after weak retail sales, factory production numbers in China and disappointing US manufacturing data.
Investors are also studying the global inflationary impact of lockdowns in China to combat the coronavirus, which has halted factory production in areas across the country.
In its article, Capital Economics wrote: “One important way the lockdowns in China can affect the rest of the world is through their effect on inflation. After all, inflation – and the central bank’s response – have been a severe headwind for global bond and stock markets this year. “. Note to customers.
Tuesday’s gains in Asian markets after the mostly weaker US session on Monday.
The S&P 500 fell 0.4 percent, while larger losses were incurred in the Nasdaq Composite, which fell 1.2 percent to 11,664.
The Dow Jones was barely positive, up just 0.08%.
“Risk markets have been affected by concerns about a deteriorating global growth outlook,” ANZ strategists said in a research note.
“Significantly disappointing Chinese data for April and a drop in the US Empire State manufacturing index has raised concerns that economic activity may suffer a sudden loss of momentum as supply chain disruption intensifies. The data file indicates that supply issues related to zero-COVID policy in China are the main factors.”
The New York Fed’s Empire State Manufacturing Index, published on Monday, showed a surprising drop during May and shipments fell at the fastest pace since the pandemic began.
In early Asian trade, the yield on the benchmark 10-year Treasury bond rose to 2.8931% compared to its US close of 2.879% on Monday.
The two-year yield, which rose with traders anticipating a hike in the federal funds rate, rose to 2.578% compared to the US close of 2.568%.
“Markets are currently pricing the fed funds rate to be 53 basis points higher at the next meeting in June, and 200 basis points by the end of the year,” said Emery Spizer, Westpac’s head of New Zealand strategy.
The dollar rose 0.06% against the yen to 129.24. It is approaching its highest level this year at 131.34.
The European single currency was up 0.1% on the day at $1.0437, after losing 0.99% in one month.
US crude fell 0.18 percent to $113.99 a barrel. Brent crude rose slightly at 114.40 dollars a barrel.
Gold was a little higher. Spot gold was trading at $1,826.7072 an ounce.