2023-10-17 03:35:14
Asian stocks rose in cautious trading on Tuesday, as investors chose to focus on the outlook for corporate earnings and the resilience of the U.S. economy ahead of tensions in the Middle East.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4%. The Tokyo Nikkei rose 1%.
Overnight, the S&P 500 rose 1%, while oil prices and the US dollar fell.
Kerry Craig, global markets strategist at JP Morgan Asset Management, said many “favorable” signs, such as the strength of the US consumer, economic growth and interest rates supporting bank profits, gave reasons to ‘hope.
Quarterly results from Goldman Sachs and Bank of America are due on Tuesday, while those from Morgan Stanley, pharmaceutical giant Johnson & Johnson, Tesla and Netflix are due later in the week.
The recent change in tone from Federal Reserve officials, who are suggesting that interest rate hikes may be over, has also cheered investors and bond markets of late.
Yields on 10-year Treasury bonds are about 15 basis points from their highest level in 16 years, although they rose in Asia on Tuesday to 4.7331%.
Investors are also trying to assess the risks of a broader conflict erupting in the Middle East, which remains a “very fluid situation,” Mr. Craig said.
US President Joe Biden will visit Israel on Wednesday, as the country prepares to step up its offensive against Hamas militants, which has sparked a humanitarian crisis in Gaza and raised fears of a wider conflict with Iran.
Iran’s foreign minister said Israel would not be allowed to act in Gaza without consequences, warning of “preventative action” by the “resistance front” in the coming hours.
The Israeli shekel weakened beyond 4 to the dollar for the first time since 2015 on Monday, as it bore some of the brunt of worry and uncertainty over the situation in Gaza.
In currency markets, the Australian dollar edged higher to $0.6354 as the minutes of the central bank’s latest meeting took a surprisingly hawkish tone, while the US dollar steadied elsewhere.
A slowdown in New Zealand inflation to a two-year low reduced bets on further interest rate rises and the kiwi, which slipped 0.4% to $0.5906.
The euro traded at $1.0549 and the yen touched the $150 mark at 149.53.
The Chinese real estate sector, for its part, plunged into difficulties with the end, on Tuesday, of a 30-day grace period on late payment from the developer Country Garden. If investors do not receive the coupon payment, all of Country Garden’s offshore debts will be deemed to be in default.
The real estate sector remained stable, while the Hang Seng rose 0.8% on Tuesday. A continental real estate index fell 0.6%.
Gold pulled away from its three-week high set on Friday and held steady at $1,915 an ounce. Brent oil futures fell more than a dollar a barrel Monday on hopes of a deal to ease U.S. sanctions on Venezuelan oil.
Brent crude futures were down 23 cents or 0.25% at $89.43 a barrel. Bitcoin jumped Monday before giving up gains after BlackRock denied a report that it had won approval for a bitcoin exchange-traded fund.
It was last at $28,353 after hitting $29,900 on Monday.
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