HONG KONG, Jan 10 (Reuters) – Asian stocks fell on Tuesday, commodities shed recent gains from China’s reopening and oil traded lower after hawkish comments from two US Federal Reserve officials overnight, with investors cautious on key inflation data became.
MSCI’s most comprehensive index of Asia Pacific stocks outside of Japan (.MIAPJ0000PUS) fell by 0.17%.
“The main theme overnight was caution in equities as stocks pared gains after hawkish comments from two Fed officials. Raphael Bostic and Mary Daly said the Fed will likely hike rates above 5% and keep them there for some time. This was announced by Commerzbank in a customer communication.
The S&P500 Index (.SPX) the week started bullish with a gain of more than 1.4% in early US trade on Monday before giving up all gains to close a touch lower.
US Treasuries and the US dollar remained under pressure, with the US 10-year yield rising 2.23 basis points to 3.5393% on Tuesday, from 3.517% late Monday.
The dollar index stayed flat.
“Sentiment could turn more cautious ahead of Thursday’s US CPI (Consumer Price Index) release, dampening ‘risk-on’ trades initiated on optimism over China’s reopening,” Mizuho Bank said in a note.
If US consumer price data confirms the slowdown seen in the latest monthly jobs report, Atlanta Fed Bank President Bostic said he needs to “take a quarter-point rise more seriously and move in that direction.” Continue reading
China stocks enjoyed a six-month winning streak on Tuesday, while Hong Kong stocks jumped to a six-month high. However, any optimism can be short-lived, said Trinh Nguyen, emerging Asia economist at Natixis in Hong Kong.
“I think what would dampen a lot of that optimism is really the reality of that opening. Even in Hong Kong, although it’s officially open, visa issuance has been pretty slow,” Nguyen said.
Prices of most base metals fell Tuesday on recent rallies fueled by the reopening of top consumer China, as traders assessed the risks of a global economic slowdown and weak consumption.
Three-month copper on the London Metal Exchange fell 0.8% to $8,786 a tonne (04:22 GMT). Copper prices hit their highest level in more than six months on Monday, while zinc climbed 5% on Monday to their highest level since December. fifteen
Japan’s Nikkei (.N225) rose 0.35%, bucking the regional trend.
Tokyo core consumer prices, released on Tuesday, rose faster-than-expected in December by 4.0% yoy, underpinning market expectations that the Bank of Japan could phase out its massive stimulus by adjusting its yield curve control policy. Continue reading
Stocks in Australia (.AXJO) 0.28% lost.
Oil fell on Tuesday on expectations of more Fed rate hikes. Continue reading
US crude fell 0.5% to $74.26 a barrel and Brent was at $79.20, down 0.56%.
Gold prices rose 0.15% to $1,872.70 an ounce.
E-mini futures for the S&P 500 showed a sluggish open, falling 0.17%.
Reporting by Selena Li; Edited by Muralikumar Anantharaman
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