Asian shares edge higher, dollar rally takes a breather

Singapore, Feb. 28 (BNA): Asian stocks rose on Tuesday, trailing small gains on Wall Street, while the US dollar paused after a sharp rally as month-end inflows lifted sentiment and investors adjusted to expectations of an interest rate hike.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.25% but was set to end the month down about 6%. Japan’s Nikkei rose 0.44%, while Australia’s S&P/ASX 200 rose 0.51%.

Chinese stocks rose 0.4% while Hong Kong’s Hang Seng rose 1%, but was on track to end its three-month winning streak as China lost ground.

According to Reuters, ING economists said, “The reopening story doesn’t seem to offer much at the moment.”

Chinese stocks have also been affected by rising geopolitical tension, with the prevailing uncertainty in US-China relations at the forefront of investors’ minds.

Anderson Alves, market analyst at ActivTrades, said the flows at the end of the month are likely to drive price action in the short term as traders rebalance their portfolios and market exposure.

Overnight, US stocks posted slight gains as investors engaged in some bargain hunting after last week’s heavy losses, as concerns about upcoming interest rate hikes continued to tame stubbornly high inflation.

Data on Monday showed orders for core capital goods accelerated in the United States in January, beating expectations, while contracts for purchases of formerly owned US homes rose by the most in more than two-and-a-half years in January.

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Monday’s data comes after a hotter-than-expected PCE report on Friday reinforced expectations that the US Federal Reserve needs to stay on its hawkish path for a while longer.

Fed futures now reflect prices that peaked at around 5.4%, implying at least three more hikes from the current range of 4.50% to 4.75%, and some odds of 50 basis points in March.

Barclays and NatWest said on Monday that they believe the Fed could raise interest rates by as much as half a percentage point in March, well above the quarter point that markets have set.

In the currency market, the pound sterling was last traded at $1.206, down 0.02% on the day, after jumping 1% overnight after Britain struck a new trade deal with the European Union, brightening expectations for the UK’s post-Brexit economy. Britain from the European Union.

The euro fell 0.07% to $1.06, after rising 0.6% on Monday.

The dollar index, which tracks the greenback against six other peers, was up 0.048% and was set for four consecutive months of losses.

US crude rose 0.13% to $75.78 a barrel, and Brent crude at $82.29, down 0.19% on the day.


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