Investors gathered at a brokerage house in China on the first day of trading since the Lunar New Year, closely monitoring stock information displayed on a board. Asian stocks experienced volatility on Tuesday as investors remained cautious due to uncertainties surrounding the interest rate outlook, China’s fragile economic recovery, and the recent developments in Russia following a failed mutiny. MSCI’s gauge of Asia Pacific stocks outside Japan saw a slight increase of 0.08 percent at 0126 GMT, after initially dropping by 0.06 percent. Meanwhile, Japan’s benchmark Nikkei average fell by as much as 1 percent. Anderson Alves, a global macro analyst at ActivTrades, commented that “Asian equities are set for a downturn on Tuesday, prompted by Wall Street’s risk-aversion behavior.” The caution prevailing among investors is due to concerns about the global economy’s trajectory in the coming months. Alves stressed that a potential recession during a high-interest rate cycle enforced by central banks could significantly impact the U.S., Europe, global trade, financing conditions, and demand.
In China, the Hang Seng Index and the CSI300 Index started with gains of 0.3 percent and 0.1 percent, respectively, recovering from the previous four sessions’ losses. S&P Global lowered its forecast for China’s economic growth to 5.2 percent in 2023 from an earlier estimate of 5.5 percent, reflecting the unevenness of the country’s recovery from the pandemic. This is the first time a global credit ratings agency has reduced China’s forecast this year, following similar moves by major investment banks like Goldman Sachs.
Redmond Wong, market strategist Greater China at Saxo Markets, highlighted that investors are closely monitoring the end-of-quarter rebalancing flows in U.S. stocks. These rebalancing flows are expected to significantly impact market dynamics as traders anticipate potential shifts in stock prices and overall market sentiment. Additionally, geopolitical turmoil, such as the failed mutiny in Russia, has dampened risk appetite among investors, raising concerns about safe-haven assets.
In the energy markets, U.S. crude rose by 0.61 percent to $69.79 a barrel, while Brent gained 0.53 percent to $74.57 a barrel, eliminating earlier gains. Spot gold increased by 0.32 percent to $1,928.9 an ounce. The dollar index experienced a minor increase of 0.029 percent in currency markets. Ten-year U.S. Treasury yields remained steady at 3.7154 percent in early Asia trade, while two-year yields fell by 7 basis points to 4.671 percent.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.