Images: Reuters Berita 24 English - Even as central banks piled on aggressive rate hikes to combat skyrocketing inflation , Asia equities c...
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| Images: Reuters |
MSCI's broadest index of Asia-Pacific stocks outside of Japan rose 0.72 percent, led by gains of 0.72 percent in Australian stocks, 0.84 percent in Seoul, and 1.07 percent in Taiwan. The Hang Seng in Hong Kong and China's main indices also rose, while the Nikkei in Japan fell 0.04 percent.
Pan-European futures were up 0.93 percent, and FTSE 100 futures were up 0.88 percent, indicating that European markets would start higher.
The dollar index =USD, which compares the greenback to six major currencies, rose 0.16 percent to 101.92, the highest level since April 26. Meanwhile, the kiwi hit a three-week high of $0.65 after the New Zealand central bank lifted rates by a whopping 50 basis points and signaled that there would be more to come.
Overnight, Wall Street was battered by dismal housing and manufacturing statistics, while central bankers in the United States approved two more major interest rate hikes as early as June and July to combat 40-year-high inflation.
The Nasdaq Composite Index fell 2.35 percent, while the S&P 500 Index fell 0.81 percent.
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New home sales in the United States plunged 16.6% month over month in April, the greatest drop in nine years, driving US Treasury rates to one-month lows as investors sought safety once more. The 10-year note yielded 2.766 percent, while the 2-year note yielded 2.522 percent.
Headlong rate hikes, though, may cause "substantial economic dislocation," according to Atlanta Fed President Raphael Bostic, who is among a small group of Fed policymakers who favor slowing the pace of rate hikes later this year if inflation cools.
Investors in Asia are also concerned about the impact of frequent Chinese COVID-19 lockdowns on growth, which threaten to undo recent stimulus measures in the world's second-largest economy.
In a note, Stephen Innes of SPI Asset Management said, "In Asia, investor debate focused on whether China's easing efforts are adequate to offset downward pressures."
"Fiscal multipliers will be small in an economy that has slowed dramatically." Moving quickly beyond mobility limitations is a prerequisite for an Asia-led economic revival, but it is not a certainty." Gold prices fell 0.19 percent to $1,862.27 per ounce on Tuesday, after reaching their highest level in two weeks the day before. On the possibility of constrained supplies, oil prices increased by more than 1%. Crude futures in the United States jumped to $111.05 per barrel, while Brent rose to $114.86.
