Asia Stocks Rise on Hopes Regional Central Banks Hold Steady on Rates
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By Selena Li
HONG KONG, (Reuters) – Asia stocks saw gains Tuesday due to investor optimism that the region’s central banks would continue to pause interest rate rise cycles or end them, regardless of any action taken by the U.S. Federal Reserve. After a long weekend of holiday weekends in many Asian markets, trading resumed on Tuesday. The broadest MSCI index of Asia-Pacific shares outside Japan rose 0.6%.
As expected, South Korea's central banks held interest rates stable for the second consecutive meeting on Tuesday morning. Gary Ng, senior economist at Natixis Corporate and Investment Bank said that Asian economies are less concerned about raising rates because they want to maintain growth. This is in contrast to the concern over inflation, which is more concerning in the U.S. and Europe.
The strong U.S. employment data released last Friday has sparked hopes that the Fed will raise rates in May. However, the market price in the 25 basis points rise is lower than previously estimated. Ng.
He said that investors were more optimistic about seeing the end to the rate cycle, but that it was up to them to determine if they are at the top. That is the real driver of the oscillation we see now.
Japan's Nikkei225 index rose 1.0% in the early trading session as the market welcomed the Bank of Japan Governor's first public comments on maintaining its ultra-easy monetary policy.
Australia's S&P/ASX 200 index rose 1.4%, with Newcrest's shares climbing as high as 7.1% due to a better takeover offer by Newmont. Newcrest is the top gainer of the benchmark.
Stocks in Hong Kong were up tech sector, with the benchmark Hang Seng rising 0.9%
Chinese artificial intelligence company SenseTime shares rose as high as 11% a single day after it revealed a series new AI-powered products. It joins a global race for dominance in the sector. Alibaba, SenseTime's investor, rose by as much as 3.8%.
Elsewhere the yield on U.S. Treasury benchmark 10-year notes dropped by 1.5 basis points, to 3.4%.
The dollar index fell 0.098% to 102.36, while the Japanese yen declined 0.15% to 133.4.
Oil markets saw U.S. crude oil rise 0.6% to $80.19 a barrel, while Brent crude oil was $84.65, up 0.6%.
The dollar fell on Tuesday, and gold prices rose by 0.32% to $1996.25