Hong Kong, Jul 5 (BUS): Asian stocks had their best day in a week on Tuesday as positive economic data and hints of easing Sino-US tensions provided some relief after the recent sell-off, despite fears of a global recession and skyrocketing. High inflation eased the mood.
MSCI Asia Pacific shares outside Japan rose 0.45%, on track for their best day since late June, while EUROSTOXX 50 futures added 0.5% and S&P500 e-mini futures added 0.4%, indicating a positive start for stocks to trade. European and American. Reuters reported.
However, the Asian regional index is down 16.86% so far this year, as concerns that central banks around the world will push economies into recession to break frenzied inflation, prompting investors to seek cover.
Offering a short respite to nervous markets was a report that US President Joe Biden was leaning toward a decision on easing tariffs on goods from China, said Redmond Wong, a market strategist, as well as the news that Chinese Vice Premier Liu He spoke to Treasury Secretary American Janet Yellen. , Greater China, at Saxo Markets Hong Kong.
He said a survey showing services activity in China grew at the fastest pace in nearly a year also helped sentiment.
Overnight, the Wall Street Journal reported that Biden was considering rolling back some tariffs on Chinese imports in an effort to slow inflation.
Hong Kong’s Hang Seng Index rose 0.25%, although the Chinese mainland’s share gave up early gains after services data as fears of an outbreak of COVID-19 cases overshadowed optimism, with blue-chips down 0.75%.
“The highly uncertain evolution of COVID-19 remains an ongoing pressure on the service sector’s future recovery, which requires sustained and targeted policy support,” Shanshan Song, HSBC’s Greater China economist, said in a note Tuesday on Chinese services data.
There was also positive data from Japan as the country’s service sector activity expanded at the fastest pace in more than eight years in June as the easing of coronavirus restrictions boosted sentiment among businesses such as those in tourism, helping the Nikkei index up 1.05%.
Referring to the dynamics of global growth and inflation, Saxo Markets’ Wong said: “Market participants are still assessing the tug-of-war between inflation that remains at persistently high levels and signs of the possibility of an upcoming recession in the US.”
Those concerns were at the fore in South Korea, where inflation accelerated in June to the fastest pace since the Asian financial crisis, boosting expectations that the central bank could raise 50 basis points for the first time next week to cool prices.
Also on Tuesday, the Reserve Bank of Australia raised its cash rate by 50 basis points to 1.35%, its third consecutive increase, and signaled further tightening ahead as it struggles to contain rising inflation.
With the RBA meeting market expectations on the policy front, the risk-appropriate Australian dollar was little changed at $0.6871.
The euro, however, benefited from improved risk sentiment, rising 0.23%.
US Treasury yields returned from the holiday high, with the benchmark 10-year note yielding 2.952% but failing to rise above the token 3% level.
Brent crude futures gave up early gains to trade 0.2% lower at $113.28 a barrel.
Spot gold rose 0.08% to $1,810.48 an ounce, reversing Monday’s losses.
MI