Singapore, Dec 8 (BNA): Asian stocks rose, supported by Hong Kong and China stocks although growing fears of an economic slowdown and concerns about the pace of interest rate hikes by the Federal Reserve weighed on sentiment.
MSCI’s broader index of Asia-Pacific stocks outside Japan rose 0.19%, and is set to end a two-day losing streak. China’s stock market rose 0.12%, with Hong Kong’s Hang Seng index up nearly 2%, according to Reuters.
Elsewhere in Asia, Australia’s S&P/ASX 200 lost 0.67%, while Japan’s Nikkei fell to its lowest level in nearly a month.
The overall market struggled for direction as traders digested data showing that US worker productivity rebounded a little faster than initially thought in the third quarter, but the trend remained subdued, keeping labor costs high.
Growing concerns that the US central bank may commit to a longer cycle of interest rate hikes in the wake of strong jobs and services sector reports dampened investors’ appetite for risk.
US Treasury yields also weighed on the stock market, with five-year notes hovering over 30-year notes at three-month lows.
“The thing that stands out is what’s happening in the US treasury market, there doesn’t seem to be much behind these moves and I think that’s what’s driving most of the rest of the market,” said Rob Carnell, ING’s head of Asia Pacific. Research.
“Ahead of the FOMC meeting next week, we may see a little bit of range trading.”
Wall Street closed lower on Wednesday, with the S&P 500 falling for the fifth straight session, while the tech-heavy Nasdaq ended lower for the fourth straight day.
Many in the market believe that inflation is easing and bond yields have peaked, allowing central banks to start slowing rate hikes when policymakers from the Federal Reserve, Bank of England and European Central Bank meet next week.
The Fed is widely expected to raise interest rates by 50 basis points next week after raising it four times in a row by 75 basis points.
The Bank of Canada hinted on Wednesday that its historic campaign of tightening was nearing an end as it raised benchmark interest rates by 50 basis points to 4.25%, the highest level in nearly 15 years.
Meanwhile, the yield on the 10-year Treasury rose 4.3 basis points to 3.451%, while the yield on the 30-year Treasury rose 3.4 basis points to 3.448%. Yields for both notes touched a three-month low on Wednesday.
The two-year US Treasury yield, which is usually in line with interest rate expectations, rose 3.9 basis points to 4.296%.
In the currency market, the dollar index rose by 0.171%, with the euro declining by 0.05% to $1.05, while the pound sterling was last trading at $1.2184, down by 0.12% during the day.
Oil prices stabilized in early Asian trade after falling to their lowest level this year.
US crude increased 0.96% to $72.70 a barrel, and Brent crude recorded $77.79, up 0.8% on the day.
FAE