Asian Markets Have Found a Moment of Stability After a Turbulent Loss

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Asian stock markets continued to make steady gains on January 31, providing relief to investors after the heavy losses in the past 24 hours.

Although US stocks concluded the previous session with modest losses, MSCI’s broadest index of Asia-Pacific shares outside of Japan experienced a little 0.4 per cent uptick. This month, the index has gained 0.8 per cent so far.

“Central banks dominate sentiment in markets and the repricing of rates yet again,” JPMorgan Asset Management’s global market strategist Kerry Craig said in an interview. 

“Equities have had a strong run since the start of the year, so seeing an air pocket emerge now is no major surprise.

“It’s a quiet week for economic data globally, and when that is the case, uncertainty over interest rates is the dominant theme among investors.”

Japan’s Nikkei Market Index increased by 0.26 per cent, while Australia’s S&P/ASX200 increased by 0.13 per cent.

Hong Kong’s Hang Seng Index started the day up 0.68 per cent, and the CSI300 Index of China’s blue-chip companies was up 0.3 per cent.

Reuters polled experts who predicted that the central bank would increase the official cash rate by another 25 basis points to 3.35 per cent. 

In contrast to the last week’s US finish of 3.632 per cent, the benchmark 10-year Treasury notes yield reached 3.6268 per cent during the Asian trading session.

The two-year yield reached 4.4368 per cent compared to a US finish of 4.456 per cent. It rises as speculators anticipate higher Fed fund rates.

Compared to its levels during US trade, the dollar index was down slightly at 103.47. It’s still significantly higher than its most recent low, 101.55 on February 3.

After reaching a three-week high of 132.9 during the US trading session, the dollar weakened 0.04 per cent against the yen to reach 132.6.

After a significant increase in employment of 517,000 in January, above economists’ forecasts, higher rates started to be repriced. 

With economic conditions likely to remain uncertain for some time, investors must remain on alert and act cautiously when investing in the region.

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