HONG KONG, June 27 — Asian stocks wobbled today as investors held tight ranges awaiting clues on the interest rate outlook and wary of risks about China’s shaky economic recovery and developments in Russia after an aborted mutiny.

MSCI’s gauge of Asia Pacific stocks outside Japan .MIAPJ0000PUS was up 0.08 per cent at 0126 GMT, after dropping 0.06 per cent an hour earlier. Japan’s benchmark Nikkei average .N225 fell as much as 1 per cent.

"Asian equities are set for a downturn today, prompted by Wall Street’s risk-aversion behaviour,” said Anderson Alves, a global macro analyst at ActivTrades.

All three major US stock indexes ended in the red yesterday, with megacap momentum stocks pulling the tech-heavy Nasdaq down the most.

The Dow Jones Industrial Average .DJI fell 0.04 per cent, the S&P 500 .SPX lost 0.45 per cent and the Nasdaq Composite IXIC dropped 1.16 per cent.

"It’s significant to mention that a sense of caution prevails among investors with respect to the global economy’s trajectory over the forthcoming months,” Alves said. "The threat of a potential recession during a high-interest rate cycle, enforced by central banks, could significantly impact both the US and Europe, thereby influencing global trade, financing conditions, and demand.”

Hang Seng Index and China’s benchmark CSI300 Index opened up 0.3 per cent and 0.1 per cent, respectively, shaking off losses from the past four sessions.

S&P Global yesterday cut its forecast for China’s economic growth to 5.2 per cent in 2023, down from an earlier estimate of 5.5 per cent, underscoring the uneven nature of the country’s recovery from the pandemic.

It was the first time a global credit ratings agency has cut China’s forecast this year and follows lowered predictions by major investment banks including Goldman Sachs.

Redmond Wong, market strategist Greater China at Saxo Markets, said investors are also closely watching end-of-quarter rebalancing flows in US stocks

"The impending rebalancing is expected to have a notable impact on the market dynamics, as traders prepare for potential shifts in stock prices and overall market sentiment,” Wong said. "With the month and quarter end coinciding, the magnitude of these rebalancing flows adds an element of anticipation and uncertainty for market participants.”

Geopolitical turmoil also dampened risk appetite following an aborted mutiny in Russia on the weekend, which appeared to reveal cracks in President Vladimir Putin’s grip on power.

"Although the situation has subsided, any subsequent insurrection against Russia remains a potential cause for concern, potentially triggering a defensive reaction in safe-haven assets,” said Alves of ActivTrades.

In energy markets, US crude went up 0.61 per cent to US$69.79 a barrel while Brent gained 0.53 per cent to US$74.57 a barrel, wiping out earlier gains.

Spot gold added 0.32 per cent to US$1,928.9 an ounce.

In currency markets, the dollar index was up 0.029 per cent.

Ten-year US Treasury yields were steady in early Asia trade at 3.7154 per cent. Two year yields fell 7 basis points to 4.671 per cent. — Reuters