HONG KONG, Oct 10 (Reuters) – Asian shares rose on
Tuesday in line with Wall Street’s high note and bonds also
rallied, boosted by dovish Federal Reserve remarks, while oil
prices edged down after Monday’s surge with the market remaining
focused on the conflict in the Middle East.
MSCI’s gauge of Asia Pacific stocks outside Japan
was up 1.2% at 0135 GMT.
Japan’s benchmark Nikkei average rose 2.4% while
Australia’s S&P/ASX 200 rose for a fourth straight
session to gain 1.2%.
Top Fed officials indicated on Monday that rising Treasury
yields could steer the Fed from further rate increases, helping
to spur a rise in bond prices after those markets had been
closed the previous day in the U.S. and Tokyo.
Markets were keeping a close watch, however, on military
clashes between Israel and the Palestinian Islamist group Hamas,
after Hamas’ surprise strike on Saturday that killed hundreds of
Israelis.
The Israeli military has since said it called up an
unprecedented 300,000 reservists and was imposing a total
blockade on the Gaza Strip, raising expectations of a possible
ground assault.
“It’s pretty early days to assess the meaningful impact of
what’s happening in the Middle East and what it actually means
for markets,” said Kerry Craig, a global market strategist at
JPMorgan Asset Management.
“If it takes a drawn-out time and we get more actors
involved in it, obviously there’s going to be a bigger market
impact from that.”
The Hang Seng Index and China’s benchmark CSI300
Index opened up 1.2% and 0.5%, respectively.
China’s largest private property developer Country Garden
Holdings warned on Tuesday morning that it might not
be able to meet all of its offshore payment obligations when due
or within the relevant grace periods, weighing on the country’s
beleaguered property sector.
U.S. stocks ended higher on Monday, with energy shares
rising along with oil prices. The S&P 500 energy index
ended up 3.5%.
The markets’ initial reaction to the major geopolitical
developments in the Middle East was a bout of risk aversion,
analysts from National Bank of Australia said in a note.
“That said, it is interesting to note that the magnitude of
the moves has been relatively contained and, in many instances,
not all the moves have been sustained,” they said.
Oil prices eased after climbing more than 4% on Monday.
Brent crude fell 0.4%, to $87.75 a barrel as of 0136
GMT, while U.S. West Texas Intermediate crude eased 16
cents or 0.5% to $85.93 a barrel.
Spot gold gained 2% to $1,864.69 per ounce, after
scaling a one-week high on Monday as investors sought safe
havens.
The dollar softened on Tuesday along with U.S. interest rate
expectations.
Ten-year Treasury yields, which have been
surging, fell more than 13 basis points to 4.6% at the open in
Tokyo as bond prices rallied after Monday’s holiday.
(Reporting by Kane Wu in Hong Kong; Additional reporting by
Stella Qiu in Sydney; Editing by Edmund Klamanhn)
