TOKYO — Asian stocks mostly rose on Tuesday after a rebound on Wall Street, despite regional investor risks reflected in negative economic data out of China.
Falling oil prices are positive for the region. In Japan, recent economic data has shown a recovery, but high COVID-19 rates are fueling fears that people are holding back on travel and other economic activities.
Some analysts say share prices have not accurately reflected real risks.
“The news doesn’t seem to matter, there’s just a huge appetite to buy stocks. And to keep buying,” said Clifford Bennett, chief economist at ACY Securities.
“Talking about the bottom having already been rated seems somewhat premature. If the market drops again after all this long positioning, it will fall with thunderous impact. Buyers beware.
The Japanese reference Nikkei 225 NIK,
little changed in the morning trade. Kospi 180721 from South Korea,
rose 0.3% and the Australian S&P/ASX 200 XJO,
added 0.5%. Hang Seng HSI from Hong Kong,
added 0.2%, while the Shanghai Composite SHCOMP,
gained 0.4%. Benchmarks in Taiwan Y9999,
and Indonesia JAKIDX,
advanced, while shares fell in Singapore STI,
Shares on Wall Street rebounded and closed higher, extending recent market gains as investors anticipate several updates from retailers this week.
The S&P 500 SPX,
rose 16.99 points, or 0.4%, to 4,297.14. The Dow DJIA,
added 151.39 points, or 0.5%, to 33,912.44. The Nasdaq COMP,
gained 80.87 points, or 0.6%, to 13,128.05.
The market got off to a bumpy start as traders reacted overnight to news that China’s central bank had lowered a key interest rate, acknowledging that more needed to be done to shore up its economy. The move is the latest warning to markets already nervous about record inflation and fears of recessions in the United States and elsewhere.
China is the world’s second largest consumer of crude oil, so the news weighed on energy prices. US crude oil prices fell 2.9% on concerns about the global economy and weighed heavily on energy stocks.
In Tuesday’s trading, US benchmark crude CLU22,
fell 57 cents to $88.84 a barrel. Brent crude BRNV22,
the international standard, lost 86 cents to $94.24.
Treasury yields fell as a report showed manufacturing in New York state unexpectedly contracted. The 10-year Treasury yield, which banks use to set mortgage rates, fell to 2.79% from 2.83% on Friday evening.
Yet all but two of the 11 S&P 500 sectors closed higher. Tech stocks, retailers and other companies that rely on direct consumer spending accounted for much of the gains.
rose 3.3% after UK regulators cleared an updated version of its COVID-19 vaccine.
The market’s choppy start to the week follows four straight weeks of gains for the benchmark S&P 500 on hopes inflation is peaking and the Federal Reserve may ease its aggressive interest rate hikes. The central bank raised short-term interest rates to help slow economic growth and calm the highest inflation in 40 years.
Wall Street fears that the Fed could apply the brakes too hard and send the economy into recession, and any signal that inflation could peak or retreat has helped ease some of those concerns.
Investors are also closely watching the impact of inflation on businesses and consumers. Spending has slowed and the economy as a whole has already contracted for two consecutive quarters. Several major retailers will give investors more details on how their businesses are holding up when they report earnings this week.
In currency trading, the US dollar USDJPY,
rose slightly to 133.40 Japanese yen from 133.27 yen.