HONG KONG, Jan 10 — Asian shares fell today, commodities shed recent gains from China’s reopening, and oil traded lower following hawkish comments from two US Federal Reserve officials overnight, with investors turning cautious ahead of key inflation data.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.17 per cent.
“The main theme overnight was cautiousness in the equity space as stocks pared gains after hawkish comments from two Fed officials. Raphael Bostic and Mary Daly said the Fed would likely hike (interest) rates to above 5 per cent and hold them there for some time,” Commerzbank said in a client note.
The S&P500 index began the week on a bullish tone with a more than 1.4 per cent increase in early US trading yesterday before giving up all the gains to close a touch lower.
US treasury notes and the US dollar remained under pressure, with the yield on US 10-year notes edging higher today by 2.23 basis point to 3.5393 per cent, from 3.517 per cent late yesterday.
The dollar index stayed flat.
“Sentiment may turn more cautious ahead of the US CPI (consumer price index) release on Thursday, dampening the ‘risk on’ trades initiated as a result of the optimism around China’s reopening,” Mizuho Bank said in a note.
If US consumer price data confirms the cooling seen in the most recent monthly jobs report, Atlanta Fed Bank President Bostic said he would have to take a quarter point increase “more seriously and to move in that direction”.
China stocks today snapped a six-session winning streak, while Hong Kong shares jumped to a six-month high. However, any optimism may be short-lived, said Trinh Nguyen, emerging Asia economist at Natixis in Hong Kong.
“I think what would temper a lot of this optimism coming up is really the reality of this opening up. Even in Hong Kong, although it is officially open, the visa issuance has been rather slow,” Nguyen said.
China’s benchmark edged up from earlier losses to gain 0.15 per cent, while losses of Hong Kong’s Hang Seng index narrowed to 0.15 per cent.
Prices of most base metals fell yesterday from recent rallies driven by top consumer China’s reopening, as traders gauged the risks of a global economic downturn and weak consumption.
Three-month copper on the London Metal Exchange was down 0.8 per cent at US$8,786 a tonne, as of 0422 GMT. Copper prices hit their highest in more than six months today, while zinc CMZN3 climbed 5 per cent yesterday to its highest since December 15.
Japan’s Nikkei rose 0.35 per cent, bucking the regional trend.
Core consumer prices in Tokyo, released on Tuesday, rose a faster-than-expected 4.0 per cent in December from a year earlier, underpinning market expectations that the Bank of Japan may phase out its massive stimulus by tweaking its yield curve control policy.
In Australia, shares lost 0.28 per cent.
Oil edged lower on Tuesday on expectations of further Fed rate hikes.
US crude fell 0.5 per cent to US$74.26 per barrel and Brent was at US$79.20, down 0.56 per cent.
Gold prices inched higher, adding 0.15 per cent to US$1,872.70 an ounce.
E-mini futures for the S&P 500 indicated a sluggish open with a 0.17 per cent dip. — Reuters
