Asian shares cautiously higher after Wall Street revival

Asian shares cautiously higher after Wall Street revival

A man wearing a protective mask walks past an electronic board displaying the Shanghai Composite Index, Nikkei index and Dow Jones Industrial Average outside a brokerage in Tokyo, amid the coronaviruses disease COVID 19 outbreak.

HONG KONG Reuters- Asian shares were cautiously higher on Tuesday after a late revival on Wall street, though global growth fears stoked by China's stringent COVID 19 curbs and an expected streak of aggressive Federal Reserve tightening sapped risk appetite.

After its worst day in two years, the broadest index of Asia-Pacific shares outside Japan went up by 0.8%, as China's blue chip index went up 0.33%, after the world's largest index of Asia-Pacific shares went up 0.8%. Hong Kong's Hang Seng Index bounced back 0.6%.

After Twitter Inc shares rose after Elon Musk, the world's richest person, clinked a deal to pay $44 billion for the social media platform, a platform populated by millions of users and global leaders, sentiment remained fragile.

The Australian benchmark fell 1.78% in early trade because of declines in miners, which hurt the local benchmark in early trade because of the nervousness about China's economic slowdown.

Japan's stock index rose by 0.57%. U.S stock futures were not changed in Asia trade.

The stringent lockdown in China and its proliferation as cases spread to other big cities like Beijing are weighing on the economic growth outlook and investment sentiment, said Manishi Raychaudhuri, Asia-Pacific equity strategist at BNP Paribas.

If the lockdown persists for longer, it will affect China's economy and have an impact on supply chains across the world, he said.

On top of the China lockdown worries, markets have been fretting that an aggressive pace of Fed tightening could derail the global economy, which has only just started to recover from the COVID 19 pandemic.

The Fed is expected to raise rates by half a percentage point at each of its next two meetings. FEDWATCH Lockdown in China's financial hub has been dragged into a fourth week, as authorities stick to their zero-Covid policy to combat the latest outbreak of Omicron cases.

The dollar was in fine fettle on safe-haven demand, and was in fine fettle in currency markets. China's offshore currency was steadier in early trading, at 6.5564 per dollar, after the People's Bank of China said late on Monday it would reduce the amount of foreign exchange banks must hold as reserves.

It rebounded from a year low of 6.609 per dollar on Monday, hurt by fears about China's economic growth.

The dollar was higher against most peers, with its index against a basket of rivals at 101.58, just off its overnight two year peak.

In morning deals, the US 10 year yields were steady at 2.8121%. The hawkish Fed-induced highs on Monday sent investors to the safety of U.S. bonds, as China's lockdown and growth fears sent it to a reversal of yields.

The oil market was stricken by the same worries on Monday, slicing 4% of its value to its lowest in two weeks. In early trade in Asia, the U.S. crude increased a bit, up 0.05% at $98.59 per barrel, and the price of Brent was at $102.42, up 0.1%.