Asia-Pacific markets trade higher; Australian central bank decision ahead

Soegeefx AppsAsia MarketAsia-Pacific markets trade higher; Australian central bank decision ahead

Abigail Ng

Shares in the Asia-Pacific traded higher on Tuesday ahead of the Reserve Bank of Australia’s rate decision. Japan’s Nikkei 225 recovered from earlier losses to rise 0.46% and the Topix index gained 0.28%. The Hang Seng index in Hong Kong advanced 0.56% in early trade, while mainland China’s Shanghai Composite added 0.4%. The Shenzhen Component was fractionally higher.

The Kospi in South Korea rose 0.3% and the Kosdaq gained 0.92%. In Australia, the S&P/ASX 200 ticked 0.14% higher.

The Reserve Bank of Australia is expected to raise interest rates by a half point to 2.35%, according to a poll by Reuters. The Australian dollar was slightly stronger at $0.6828 in morning trade. MSCI’s broadest index of Asia-Pacific shares outside of Japan rose 0.44%.

.N225 Nikkei 225 Index *NIKKEI 27670.88 51.27 0.19
.HSI Hang Seng Index *HSI 19244.48 18.78 0.1
.AXJO S&P/ASX 200 *ASX 200 6860.7 8.5 0.12
.SSEC Shanghai *SHANGHAI 3213.07 13.16 0.41
.KS11 KOSPI Index *KOSPI 2404.7 1.02 0.04
.FTFCNBCA CNBC 100 ASIA IDX *CNBC 100 7753.37 17.02 0.22

On Monday, the People’s Bank of China announced it would cut the foreign exchange reserve requirement ratio, or the amount of FX reserves that financial institutions must hold, to improve the ability of financial institutions to use foreign exchange funds.

Starting Sept. 15, the RRR will be 6%, down from 8%.

“This cut should help increase FX liquidity and thus lower depreciation pressure for CNY. While the actual impact on FX liquidity is small … this cut serves as a strong policy signal that the PBOC is uncomfortable with the rapid depreciation of the currency,” analysts at Goldman Sachs Economics Research wrote in a note late Monday.

U.S. markets were closed overnight for a holiday. In oil markets, U.S. crude extended gains from the previous session, while Brent crude declined slightly.

CNBC Pro: Forget the volatility. Buy this ETF for a long term growth story, analyst says

Investors should navigate the ongoing market volatility by getting into ETFs with a long-term growth story, according to one portfolio manager.

“The idea of owning ETF instead of one specific player — you have the whole basket and ride the wave of more capital investment into the cyberspace,” John Petrides, portfolio manager at Tocqueville Asset Management, told CNBC.

He names his favorite cyber security ETF, along with two others.

— Weizhen Tan

U.S. crude futures extend gains following OPEC+ production cut

U.S. benchmark West Texas Intermediate crude futures rose in Asia’s morning trade, extending gains from Monday’s session.

WTI rose 2.16% to $88.75 per barrel, after gaining more than 2% in the previous session following news that OPEC and its allies agreed to a small production cut. Brent crude futures slipped 0.66% to $95.11 per barrel after climbing nearly 3% on Monday.

— Abigail Ng

CNBC Pro: Hold cash as it’s beating the market, say the pros

Strategists are urging investors to allocate more of their portfolios to cash during these volatile times, as interest rate hikes mean it’s now offering higher yields.

“Cash was king” last month, Bank of America said in a Sept. 1 note, as most asset classes — such as stocks, bonds and even commodities — posted losses. Here’s how to add it to your portfolios, according to the pros.

— Weizhen Tan

Source : CNBC

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