An investor looks at an electronic board displaying stock information at a brokerage house in Beijing, China, August 25, 2015. China’s main stock indexes fell more than 6 percent in early trade on Tuesday, after a disastrous Monday that saw Chinese bourses suffer the most losses since the global financial crisis, destabilize financial markets around the world. REUTERS/Kim Kyung Hoon
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HONG KONG, Aug 9 (Reuters) – Asian equities posted modest gains on Tuesday as buyers were held back by ongoing global cost pressures, with investors this week focusing on US inflation data and the prospect of more aggressive Federal Reserve rate hikes.
Friday’s stronger-than-expected US jobs data has raised the stakes for the July US CPI report due Wednesday, particularly the Fed’s monetary policy outlook.
“US stocks struggled to hold gains as focus shifts from a resilient US jobs market to US CPI data to be released later this week,” ANZ analysts said in a statement.
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“The priority of lowering inflation to support expanding domestic demand and sustained job growth will be made loud and clear in Jackson Hole August 25-27.”
European markets were set for a lower open, with pan-regional Euro Stoxx 50 futures down 0.16%, German DAX futures down 0.16% and FTSE futures down 0.12%. US stock futures, the S&P 500 E-Minis, rose 0.22%.
“Movements in major financial markets continue to reflect fears of a global recession. European stock futures declined. Oil prices eased slightly in the Asia session and remain well below early June highs,” CBA analysts said.
MSCI’s broadest index of Asia Pacific equities outside Japan (.MIAPJ0000PUS) rose 0.3%. The index is up 0.5% so far this month.
Japan’s Nikkei (.N225) slipped 0.95% as it was hit by weak quarterly earnings from heavyweights and lowered expectations for the video game market, while Australian stocks (.AXJO) gained 0.06%.
Chinese stocks edged higher, led by energy and renewable energy stocks. Gains were limited, however, as COVID-19 outbreaks and tensions with the United States weighed on sentiment after US House Speaker Nancy Pelosi’s visit to Taiwan last week. Continue reading
China’s blue-chip index CSI300 (.CSI300) rose 0.16%. Hong Kong’s Hang Seng Index (.HIS) gained 0.4%.
On Monday, Wall Street closed broadly unchanged after last week’s blockbuster jobs data boosted expectations that the Federal Reserve will crack down on inflation, while a sales warning from chipmaker Nvidia reminded investors of a slowing US economy.
Investors are now awaiting CPI data on Wednesday to gauge whether the Fed could ease its inflation fight and lay a better foundation for the economy to grow. Continue reading
On the price front, there were some encouraging signs for the Fed, with a New York Fed survey Monday showing that consumer inflation expectations fell sharply in July. Continue reading
The Dow Jones Industrial Average (.DJI) rose 0.09%, while the S&P 500 (.SPX) lost 0.12% and the Nasdaq Composite (.IXIC) fell 0.1%.
Bonds also received a safe bid as Beijing worried amid days of Chinese military drills across the island with saber-rattling against Taiwan.
The yield on the benchmark 10-year Treasury rose to 2.7608%, compared to Monday’s US close of 2.763%. The two-year yield, which rises on traders’ expectations for higher Fed fund rates, hit 3.2056% compared to a US close of 3.216%.
The dollar index, which tracks the greenback against a basket of currencies from other major trading partners, rose to 106.35.
Oil prices continued their recent slide after suffering their worst week since April on fears of stalling global demand as central banks tighten further. OR
US crude fell 0.11% to $90.66 a barrel. Brent crude fell to $96.51 a barrel.
The dollar’s rise was a setback for gold, although it managed to recover from the lows hit on Friday, trading at $1,785.67 an ounce.
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Edited by Shri Navaratnam
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