Hong Kong, Oct. 26 (BUS): Asian stocks rose on Tuesday, as upbeat Wall Street earnings raised the broader economic outlook despite fresh concerns about China’s property sector hitting the Hong Kong and mainland markets.
Japan’s benchmark Nikkei index opened 1.14% higher on Tuesday, while Australia’s S&P/ASX 200 rose 0.2% at 0133 GMT. MSCI’s gauge of Asia Pacific shares outside Japan rose 0.23%.
The Hang Seng Index and China’s CSI300 Index opened higher but fell into negative territory, weighed down by real estate stocks.
A large proportion of the S&P 500 companies are due to report results this week, including technology heavyweights like Facebook, Apple Inc, Amazon, Microsoft and Alphabet, which have been the main drivers of the market’s rally this year.
“Among the S&P 500 companies reporting this season, the net profit surprise was 13%. So it’s easy to understand the optimism permeating risk appetite despite inflation concerns,” ANZ Research said in a note on Tuesday.
“The economy remains very strong. We expect the recovery to accelerate once bottlenecks and Covid concerns abate,” ANZ analysts said in the note.
The Dow Jones Industrial and S&P 500 indexes closed at record highs on Monday. Tesla, which jumped 12.66% and breached $1 trillion in market capitalization, also provided the biggest boost to the S&P 500 and Nasdaq.
China has said it will introduce a trial property tax in some regions, adding to investors’ existing concerns about mainland real estate.
The index of mainland real estate companies listed in Hong Kong fell 4%.
“The market is still going in a strong direction, especially as it starts to understand that the Fed will start tapering off in November,” said Edison Bohn, chief market analyst at Saxo Markets.
“However, we need to watch if this will put additional pressure on the Chinese property market when the property tax is introduced. It could hurt consumption eventually if we see a general decline in Chinese property prices,” he said.
US Treasury yields were lower as uncertainty over when the Federal Reserve would raise rates to curb rising inflation weighed on market sentiment.
The dollar rose 0.1% on Tuesday, recovering from nearly one-month lows hit during the previous session.
Oil prices rose on Monday and reached multi-year highs, with tight global supplies and boosting fuel demand in the United States and beyond subsidized prices.
Brent crude futures fell 0.03% to $85.96 a barrel, while US West Texas Intermediate (WTI) crude futures fell 0.04% to $83.72 a barrel in Tuesday morning trading.
Spot gold fell 0.21% to $1,803. per ounce.
HF