Global Markets: Asia shares gain despite rising China COVID cases

Twamev Construction and Infrastructure

23/11/2022 05:43

By Scott Murdoch
       SYDNEY, Nov 23 (Reuters) - Asian share markets mostly
rose on Wednesday but oil and the dollar slipped as rising
COVID-19 cases in China raised fears of fresh lockdowns that
could slow the reopening of the world's second-largest economy. 
    European equities looked set to follow Asia higher, with the
pan-region Euro Stoxx 50 futures  STXEc1  up 0.33%, Germany's
DAX futures  FDXc1  up 0.27% and FTSE futures  FFIc1  up 0.16%. 
  U.S. stock futures, the S&P 500 e-minis  ESc1 , slipped 0.07%.
    MSCI's broadest index of Asia-Pacific shares outside Japan
 .MIAPJ0000PUS  rose 0.4%, buoyed by gains in U.S. stocks
overnight. The index is up 12% so far this month.  
    Australian shares  .AXJO  were up 0.63%, led by mining and
resources giants. Japan's stock market  .N225  was closed for a
national holiday.
    New Zealand's central bank raised interest rates by 75 basis
points - its largest ever move - on Wednesday to a near 14-year
high of 4.25% and flagged more hikes are on the way as it
struggles to contain stubbornly high inflation.
    Hong Kong's Hang Seng Index  .HSI  was up 0.46% in early
trade while China's CSI300 Index  .CSI300  was down 0.2%.
    China on Wednesday reported 29,157 new COVID infections for
Nov. 22, compared with 28,127 new cases a day earlier. Case
numbers in Beijing and Shanghai are steadily rising, and remain
high in several major manufacturing and export hubs, prompting
authorities to close some facilities.
    "The biggest story for investors in Asia is still the China
reopening," said Suresh Tantia, Credit Suisse's senior
investment strategist in Singapore.
    "We had seen China markets rally up to 20% but those
expectations are being dialled back, we think a reopening will
be a slower process and will not be done in a hurry. That means
a lot of investors are trimming their exposure, cutting their
losses or booking any profits they might have made on China."
    Meanwhile, the release of U.S. Federal Reserve minutes from
its November policy meeting later on Wednesday is being keenly
awaited by investors as they look for any sign of discussions
about moderating the pace of interest rate hikes.
    The November consumer price index will be published on Dec.
13, the day before the central bank delivers its final interest
rate decision for 2022.
    "The Fed is going to be very data driven and they are will
need to see more than one softer inflation result because one
weaker month in October is not a trend," said Clara Cheong,
JPMorgan Asset Management investment strategist.
    "If November shows inflation cooling, we still think the Fed
will raise by 50 basis points rather than less or showing any
signs they are starting a pivot."
    In Asian trading, the yield on benchmark 10-year Treasury
notes  US10YT=RR   rose to 3.7578% compared with its U.S. close
of 3.758% on Tuesday. 
    The two-year yield  US2YT=RR , which rises with traders'
expectations of higher Fed fund rates, touched 4.5144% compared
with a U.S. close of 4.517%. 
    The dollar rose 0.13% against the yen to 141.43  JPY= . 
    The European single currency  EUR=  was up 0.1% on the day
at $1.0313, while the dollar index  =USD , which tracks the
greenback against a basket of currencies of other major trading
partners, was mildly weaker at 107.07.
    "The U.S. dollar lost a little of its recent gains
(as) central bankers' consensus about how much more interest
rates should rise is fraying," Commonwealth Bank analyst Tobin
Gorey wrote on Wednesday.
    "Smaller or fewer rate rises are perhaps not a cause for
optimism, it is cause for less pessimism."
    Oil failed to hold on to earlier gains during the Asian
session. 
    It rose initally after top exporter Saudi Arabia said OPEC+
would maintain output cuts and could take further steps to
balance the market. 
    But prices started to fall later in the session. By midday, 
U.S. crude  CLc1  had dipped 0.19% to $80.80 a barrel and Brent
crude  LCOc1  was down 0.3% at $88.08. 
    Gold was slightly lower. Spot gold  XAU=  was traded at
$1734.35 per ounce.  GOL/ 
    While the FTX exchange collapse continues to roil
cryptocurrency markets, Bitcoin  BTC=  was up 2.2% in Asian
trading hours to $16,482. 
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates YTD    http://tmsnrt.rs/2egbfVh
Global asset performance    http://tmsnrt.rs/2yaDPgn
Asian stock markets    https://tmsnrt.rs/2zpUAr4
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 (Reporting by Scott Murdoch in Sydney; Editing by Kenneth
Maxwell and Kim Coghill)
 ((Scott.Murdoch@thomsonreuters.com;))
 
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