Image: Reuters Berita 24 English - As the market took stock after a recent strong selloff, Asian equities and U.S. share futures rose on Tue...
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| Image: Reuters |
Berita 24 English - As the market took stock after a recent strong selloff, Asian equities and U.S. share futures rose on Tuesday, but concerns remained that aggressive central bank rate hikes to curb inflation may ignite a worldwide recession.
In early trade, MSCI's broadest index of Asia-Pacific equities outside Japan jumped 0.85 percent, moving up from a more than five-week low recorded the day before.
The Nikkei 225 index in Japan opened 1.16 percent higher, while Nasdaq and S&P500 e-mini share futures both jumped over 1.5 percent.
"I don't think the green we're seeing this morning is a reflection of people returning to risk assets," Kerry Craig, global market strategist at JPMorgan Asset Management, said.
"It's just usual behaviour on a huge selloff to see some reprieve and breathing room come through because nothing fundamentally changed on the macro level last week," says the analyst.
The price of Chinese blue chips increased by 0.5 percent.
Central banks around the world are aiming to aggressively boost interest rates to combat increasing inflation, a position echoed by Reserve Bank of Australia (RBA) Governor Philip Lowe, who hinted at more rate hikes in a speech on Tuesday.
"As we work our way back to 2% to 3% inflation, Australians should expect more interest rate hikes," Lowe cautioned. "Interest rates are still at historically low levels for an economy with low unemployment and rising inflation."
Despite this, the S&P/ASX 200 index in Australia rose 1.12% in early trading. On the news, the Australian currency jumped 0.3 percent before reversing its gains.
After European stock markets posted moderate gains on Monday to rebound a little from last week's huge losses, the euro climbed 0.25 percent on improved risk sentiment. Markets in the United States were closed for the holiday.
The dollar index, which compares the greenback to six major currencies, fell to 104.29. The Japanese currency was trading at 135.07 yen per dollar, not far from a 24-year low of 135.58 yen set early last week. [FRX/]
The yield on benchmark 10-year treasury notes in the United States was 3.2976 percent on Friday, up slightly from the previous day's close.
The 10-year yield hit a new high of 3.495 percent last week, the most since 2011, on the same day the Fed hiked interest rates by a huge 75 basis points.
With traders focusing on tight supply rather than sluggish global economic growth, oil prices soared higher. US crude was up 2.12 percent to $111.88 a barrel, while Brent was up 1.25 percent to $115.56.
Treasury Secretary Janet Yellen said on Monday that the US is in negotiations with Canada and other allies around the world to further limit Moscow's energy revenue by setting a price restriction on Russian oil without producing spillover effects to low-income countries.
The price of spot gold increased by 0.1 percent to $1,840.40 per ounce. Gold futures in the United States have risen 1% to $1,835.60 per ounce.
In recent days, Bitcoin had failed to break strongly above or below the psychologically critical $20,000 mark, and was trading near $20,500.
