HONG KONG Asian shares wiped out morning gains on Tuesday afternoon, as investors remained cautious ahead of a European Central Bank meeting this week, while watching out for the fallout from Russia's gas cut.
After Monday's Labor Day recess, the US stock market is poised to open higher, with E-mini futures for the S&P 500 index up 0.31 per cent.
FTSE futures were down 0.2 per cent, indicating a choppy start in London. European stock indexes fell on Monday, the euro fell below 99 cents for the first time in twenty years and European gas prices surged after Russia said its main gas supply pipeline to Europe would remain shut.
The MSCI's index of Asia-Pacific stocks outside Japan was up 0.02 per cent at 0532 GMT. Japan's Nikkei 225 was 0.03 per cent higher.
The benchmark CSI 300 Index rose 0.58 per cent after the country's policymakers pledged on Monday to make renewed efforts to boost the COVID-hit economy. Hong Kong's benchmark Hang Seng Index, however, fell 0.07 per cent.
The yuan rebounded from a two-year low against the US dollar after the central bank said it would cut the foreign exchange reserves ratio to support the currency.
The success of this will be reflected in the major miners, said John Milroy, an investment adviser at Ord Minnett, who said that bulk commodities will be dependent on the impact of Chinese stimulus.
Australia's S&P ASX 200 fell 0.36 per cent, after the Reserve Bank of Australia RBA expected to increase the cash rate by 50 basis points.
The European Central Bank will hold a meeting on Thursday to discuss interest rate actions. On September 21 there will be a U.S. Federal Reserve meeting.
The ECB is expected to raise rates further this Thursday, according to analysts from the Commonwealth Bank of Australia.
European energy ministers are expected to discuss measures to curb power prices when they hold an emergency meeting on Friday.
The next 75 bp hike in September will have a deceleration, said Sean Darby, Hong Kong-based global head of equity strategy for Jefferies.
Oil prices fell on Tuesday, paring the previous session's 3 per cent gain, as a deal among members of the OPEC group to cut output by 100,000 barrels per day in October was seen as a largely symbolic move to stem the market's recent slide.
The price of crude futures fell 0.7 per cent to $95.07 a barrel, widening morning losses. U.S. crude futures were up 2.12 per cent at $88.71 a barrel.
Spot gold rose 0.49 per cent to $1,718. 2 an ounce.
The dollar index was down 0.06 per cent after touching a 20 year peak in the previous session.