Asian stock markets rebound as bargain buyers rush

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Major Asian markets rebounded from a prolonged slump on Tuesday as bargain buyers took hold and investors were buoyed by higher U.S. futures.

MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 1.3% and was poised for its best day in about two weeks as markets paused to reassess growth prospects after the Fed rate hike last week.

The Japanese Nikkei rebounded strongly from a three-month low on Tuesday as investors cheered higher US stock futures and recovered from battered cyclical stocks.

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Nikkei stock average ended the day up 1.84% at 26,246.31, after gaining as much as 2.5% during the session. Earlier in the week, the benchmark had plunged to a low of 25,520.23 for the first time since March 16. The broader Topix rose 2.05% to 1,856.20.

Tech had several big winners in Tokyo. Sony Group jumped 3.99%, while start-up investor SoftBank Group rose 2.88%, but the best performing sector in the Nikkei was energy, which rebounded 3.74% against a backdrop of rising crude oil prices.

“You can call it a rebound in an oversold market, but the rapidity of the gains is creating some panic among people who have been selling at the bottom,” said a market participant at a national securities firm.

Across the water, Chinese equities had a mixed day, with Hong Kong advancing but mainland equities the opposite.

Tech names were also among the leaders with Hong Kong-listed companies up 1.9% and the Hang Seng Index gained 1.87%, or 395.68 points, to 21,559.59.

The Shanghai Composite Index, however, fell 0.26%, or 8.71 points, to 3,306.72, while the Shenzhen Composite Index on China’s second-largest stock exchange fell 0.51%, or 11 .04 points, at 2,147.29.

Mumbai’s Nifty 50 wins

Elsewhere in the region, markets recovered some of their recent losses and an index that tracks Asian emerging markets rose slightly from a five-week low.

Shares in Malaysia, Thailand, Singapore and Indonesia rose between 0.7% and 0.8%, while those in South Korea and India also rose. Mumbai’s signature Nifty 50 index rose 2.20%, or 338.05 points, to 15,688.20.

Globally, equities also rallied and the safe-haven dollar edged lower as investors paused to catch their breath after a sharp sell-off in recent weeks, but concerns remain over aggressive price rises. central bank interest rates and the risks of a global recession.

U.S. markets, which were closed Monday for a holiday, looked set for a bigger pop at the open with S&P 500 e-mini stock futures up 1.63% and stock futures Nasdaq e-mini rising 1.76%.

Central banks around the world are looking to raise interest rates aggressively to rein in rising inflation, a sentiment highlighted on Tuesday by Reserve Bank of Australia Governor Philip Lowe, who highlighted in a speech further rate hikes.

The Australian S&P/ASX 200 index climbed 1.45% and the Australian dollar was little changed.

Fed, Bank of England indices

Continuing the central banking theme, two Federal Reserve policymakers are due to speak later in the day, as are two speakers from the Bank of England. Traders will be watching their remarks closely for clues on the path of interest rates.

In currency markets, the dollar index, which tracks the greenback against a basket of its peers, fell slightly in line with improving risk sentiment to 104.37 as the dollar lost a minimum. ground against the euro.

The Japanese yen remained under pressure at 135.1 yen to the dollar, not far from a 24-year low of 135.58 yen hit early last week.

In bond markets, the yield on the benchmark 10-year US Treasuries was 3.2825%, up from last Friday’s close of 3.2313.

Last week’s 3.495% spike was the highest in the 10-year yield since 2011 and came the same day the Fed raised interest rates by 75 basis points.

Oil swings higher

Oil prices soared as traders focused on tight supplies rather than slowing global economic growth. U.S. crude rose 1.79% to $111.52 a barrel and Brent to $115.47, up 1.17% on the day.

The United States is in talks with Canada and other allies around the world to further restrict Moscow’s energy revenues by imposing a price cap on Russian oil without causing ripple effects on low-income countries, Treasury Secretary Janet Yellen said Monday.

Bitcoin was at $20,629, having failed to break strongly above or below the psychologically significant $20,000 level in recent days.

Key figures

Tokyo – Nikkei 225 > UP 1.84% to 26,246.31 (closing)

Hong Kong – Hang Seng Index > UP 1.87% to 21,559.59 (closing)

Shanghai–Composite

New York–Dow

  • Reuters with additional editing by Sean O’Meara

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Sean O’Meara

Sean O’Meara is an editor at Asia Financial. He has been a newspaper man for over 30 years, working for local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. Passionate about football, cricket and rugby, he is particularly interested in the financing of sport.

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