Asian stocks rise ahead of Fed rate decision

China shares also jumped with blue-chip CSI300 index up 2.3% after hitting a three-and-a-half year low on Monday.

“The market rally in both mainland China and Hong Kong today was partly driven by some investors’ bet that Beijing would have to revise its strict zero-Covid policy in the near future,” said Zhang Zihua, chief investment officer at Beijing Yunyi Asset Management.

“Also, several tech stocks have been trading at historical lows in Hong Kong in recent weeks. Investors thought it’s a good window to buy into them.”

Australian shares were up 1.65% in afternoon trade, with the mining index leading the gains.

The country’s central bank on Tuesday stuck with a slower pace of interest-rate rises for a second month while revising up its inflation outlook, reiterating that further tightening was likely.

Japan’s Nikkei stock index rose 0.22% on strong outlook of some companies amid a mixed earnings season.

US stocks lose ground

On Monday, US stocks lost ground with the major indexes closing out a strong month of gains on a weaker foot. The Dow Jones Industrial Average fell 0.39%, the S&P 500 lost 0.75% and the Nasdaq Composite dropped 1.03%.

Hopes the Fed may pull back from its aggressive interest-rate hike policy lifted US equities last month with the Dow jumping 13.95%, the S&P climbing 7.99% and the Nasdaq advancing 3.9%.

US treasury yields eased slightly across the curve with the two-year yield — which rises with traders’ expectations of higher Fed fund rates — touching 4.4555% compared with a US close of 4.501% on Monday. The yield on benchmark 10-year treasury notes stood at 4.0274% compared with its US close of 4.077%.

In currencies, the dollar was firm against the struggling Japanese yen to 148.34 yen and rose to $0.991 per euro on Tuesday.

Japan’s finance ministry on Monday said it spent a record $42.8bn on currency intervention last month to prop up the yen.

China’s yuan hit a near 15-year low against the dollar on Tuesday, after the central bank fixed the official guidance rate at its lowest level since the global financial crisis of 2008.

The onshore yuan in afternoon trade reversed losses and bounced to a high of 7.26 per dollar.

In the energy market, oil prices recovered some losses from the morning session with US crude up 0.8% to $87.22 a barrel. Brent crude rose to $93.67 a barrel.

Gold was slightly higher, with spot gold traded at $1,638.82/oz.

Reuters