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Asia-Pacific stocks largely slip as investors watch China’s Covid situation

Soegeefx AppsAsia MarketAsia-Pacific stocks largely slip as investors watch China’s Covid situation

Key Points

  • Asia-Pacific stocks largely slipped in Tuesday morning trade.
  • The World Health Organization said Monday it is monitoring the Covid situation in mainland China, where officials are battling a severe surge in cases.
  • U.S. inflation data is also expected to be out later Tuesday stateside and could provide more clues on the outlook for Federal Reserve policy.

SINGAPORE — Shares in Asia-Pacific largely slipped in Tuesday morning trade, as investors continue monitoring developments surrounding the Covid situation in mainland China.

U.S. inflation data is also expected to be out later Tuesday stateside and could provide more clues on the outlook for Federal Reserve policy.

Chinese markets attempted to recover after heavy losses on Monday.

The Shanghai composite shed early gains to trade 0.17% lower while the Shenzhen component advanced fractionally.

Over in Hong Kong, the Hang Seng index rose about 0.6%. Shares of Tencent and NetEase in the city surged 4.47% and 4.42%, respectively, after Chinese regulators approved new games for monetization following a months-long freeze.

The World Health Organization said Monday it is monitoring the Covid situation in mainland China, where officials have been battling a major surge in cases.

The major Chinese city of Shanghai has accounted for most of mainland China’s new Covid cases and was in lockdown about a week after a two-part shutdown was originally supposed to end. The U.S. State Department also ordered all non-emergency government staff and their family members in Shanghai to leave amid the Covid surge.Very high US inflation will keep alive market expectations for aggressive FOMC tightening in our view.Carol KongSenior associate for currency strategy and international economics, Commonwealth Bank of Australia

Elsewhere, the Nikkei 225 in Japan slipped 1.2% as shares of robot maker Fanuc dropped more than 4%. The Topix index dipped 1.04%. South Korea’s Kospi shed 0.87%.

Australian stocks also declined, with the S&P/ASX 200 trading 0.51% lower.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded below the flatline.

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Overnight stateside, the Dow Jones Industrial Average shed 413.04 points to 34,308.08 while the S&P 500 slipped 1.69% to 4,412.53. The tech-heavy Nasdaq Composite lagged, dropping 2.18% to 13,411.96.

The U.S. consumer price index for March is set to be released during ET time Tuesday, with the White House warning that it expects the report to show inflation that is “extraordinarily elevated.” Economists polled by Dow Jones expect the data to show an 8.4% annual increase in prices, the highest since December 1981.

“Very high US inflation will keep alive market expectations for aggressive FOMC tightening in our view,” said Carol Kong, senior associate for currency strategy and international economics at Commonwealth Bank of Australia.

“We expect the FOMC will respond to strong underlying inflation by increasing the Funds rate by 50bp in May and in June,” Kong said.

TICKER COMPANY NAME PRICE CHANGE %CHANGE
.N225 Nikkei 225 Index *NIKKEI 26415.78 -405.74 -1.51
.HSI Hang Seng Index *HSI 21198.14 -10.16 -0.05
.AXJO S&P/ASX 200 *ASX 200 7431.7 -53.5 -0.71
.SSEC Shanghai *SHANGHAI 3164.51 -2.61 -0.08
.KS11 KOSPI Index *KOSPI 2662.83 -30.27 -1.12
.FTFCNBCA CNBC 100 ASIA IDX *CNBC 100 8835.62 -30.8 -0.35

Dollar index tops 100 level

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 100.109 — continuing to hold above the 100 level.

The Japanese yen traded at 125.44 per dollar following yesterday’s weakening from below 125 against the greenback. The Australian dollar was at $0.7404, lower than levels above $0.744 seen yesterday.

Oil prices were higher in the morning of Asia trading hours, with international benchmark Brent crude futures climbing 1.06% to $99.52 per barrel. U.S. crude futures gained 1.24% to $95.46 per barrel.

Source : CNBC

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