Asian Shares Rise as Fed Comments Boost Market Sentiment
Asian Shares and Bonds Rally
Asian shares rose on Tuesday, following the positive trend set by Wall Street. Bonds also rallied, driven by dovish remarks from the Federal Reserve. Meanwhile, oil prices dipped slightly after Monday’s surge, with market attention focused on the ongoing conflict in the Middle East.
Market Performance in Asia
MSCI’s gauge of Asia Pacific stocks, excluding Japan, grew by 1.2% at 0135 GMT. Japan’s benchmark average rose by 2.4%, while Australia’s stock market saw a fourth consecutive session of gains, rising by 1.2%.
Fed’s Influence on Bond Prices
Top Federal Reserve officials suggested on Monday that rising Treasury yields could halt further rate increases. This helped boost bond prices after the US and Tokyo markets had been closed the previous day.
Concerns Over Middle East Conflict
Markets remained vigilant about the military clashes between Israel and the Palestinian Islamist group Hamas. The Israeli military’s response to the surprise attack raised expectations of a potential ground assault, intensifying geopolitical tensions in the region.
Impact of Middle East Conflict on Markets
Kerry Craig, a global market strategist at JPMorgan Asset Management, stated that it is too early to assess the full impact of the Middle East situation on markets. However, if the conflict escalates and more actors become involved, the market impact could be greater.
China’s Market and Property Sector
China’s benchmark CSI300 Index opened with a 0.5% increase, while the Shanghai Composite Index rose by 1.2%. However, China’s largest private property developer, Country Garden Holdings, issued a warning regarding its offshore payment obligations, adding to the challenges faced by the country’s property sector.
US Stocks and Oil Prices
US stocks ended higher on Monday, with energy shares rising alongside oil prices. The energy index saw a 3.5% increase. Oil prices, which had climbed over 4% on Monday, experienced a slight decline. Brent crude fell by 0.4% to $87.75 a barrel, while US West Texas Intermediate crude dropped by 0.5% to $85.93 a barrel.
Gold Prices and Dollar Softening
Gold prices rose by 2% to $1,864.69 per ounce, reaching a one-week high as investors sought safe havens. The dollar also softened in response to reduced US interest rate expectations.
Bond Prices Rally in Tokyo
Ten-year Treasury yields, which had been surging, fell by over 13 basis points to 4.6% at the opening in Tokyo. This rally in bond prices followed Monday’s holiday, contributing to the overall positive market sentiment.
