Hong Kong, Nov. 16 (BNA): Asian stocks rose mostly on Tuesday, as relief in China’s real estate sector boosted sentiment while investors kept closely watching an important meeting between US President Joe Biden and Chinese leader Xi Jinping.
Biden and Xi Jinping opened their closely watched talks warmly, with the two leaders emphasizing their responsibility to the rest of the world to avoid conflict.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.27% to a two-and-a-half week high, while Japan’s Nikkei rose 0.39%.
“Investors will be watching closely the first Biden-Xi summit to see if the exchange leads to any improvement in an already fraught relationship,” said David Chao, global market analyst for Asia Pacific (former Japan) at Invesco. According to Reuters, “While no breakthroughs are expected, it is still a positive first step forward.”
Zhao added that markets in Asia this week are also responding to better-than-expected China economic data, which was released on Monday, and the situation in the mainland property market.
“So far we haven’t seen a loss of confidence in some developers and the government has come out with more force to ensure homeowners are protected,” he said.
China’s blue chip stocks rose 0.4%, and the Hong Kong benchmark rose 0.7%, boosted by real estate stocks
The index of Chinese developers listed in Hong Kong rose 3%. However, shares of Kaisa Prosperity, a real estate services unit of developer Kaisa Group, fell 14% after resuming trading a day after the company said its parent company’s liquidity issues would not affect operations.
US stock futures, S&P 500 e-minis advanced 0.11%, and Nasdaq futures rose 0.17%.
Wall Street closed for minor changes as rising Treasury yields dented appetite for technology stocks, but boosted interest in financial institutions.
Benchmark US Treasury yields rose nearly five basis points to a three-week high on Monday as companies scrambled to sell debt before liquidity weakened during the trade holiday and before the US government sold new 20-year bonds on Wednesday.
They pulled back on Tuesday and last settled at 1.6094% although it is still sharply higher since a one-month low of 1.42% hit a week ago.
Also helped by higher yields was the dollar, which remained solid at a 16-month high against a basket of peers.
Currency markets are also driven by investors’ assessment of the various responses to rising inflation from global central banks.
European Central Bank President Christine Lagarde on Monday backed away from market bets to tighten monetary policy, saying doing so now to rein in inflation could stifle the euro zone recovery.
This dragged the Euro down to approach a 16-month low of $1,354. The pound was $1.3359 near a one-year low and the dollar was at 114.17 against the yen, within sight of a four-year high in October at 114.69.
The dollar was also helped by recent data showing a strong US economy which also cast doubt on the Fed’s view that price pressures will be temporary, fueling speculation that interest rates will be raised sooner than previously thought.
Britain will publish its September labor market report later on Tuesday, which CBA analysts said “could refute or break the case for a rate hike this year”.
Later in the day, US retail sales, trade prices and industrial production for October are due, giving another hint about the health of the economy.
In the oil markets, US crude rose 0.37% to $81.18 a barrel. Brent crude rose 0.5 percent to $82.48 a barrel.
Gold was constant; Spot gold was at $1,862 an ounce against Monday’s five-month high of $1,870.
HF