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Investors in Asia-Pacific stock markets began shaking off their earlier caution ahead of the latest U.S. reading on inflation, which is likely to give some idea about whether the Federal Reserve will accelerate its pace of interest-rate increases.
Shares across the region started to eke out gains in the afternoon or pare losses after a subdued start, following overnight falls in heavyweight U.S. industrials.
Recent inflation reports from the U.S. have been sources of volatility in markets as investors try to guess the trajectory of Fed policy tightening.
“It was only one month ago a surprise inflation print sent the market into a tailspin,” said Stephen Innes, head of trading for Asia at currency broker Oanda.
Strong numbers this time could prompt the Fed to take a firmer stance against inflation, though if they are just slightly positive they will feed into a positive take on the economy and for markets, said David Gaud, chief investment officer for Asia at Pictet Wealth Management.
Japanese stocks NIK, +0.66% closed up 0.6%, after posting losses most of the morning. Gains in the yen eased a touch as investors took a largely sanguine view of continuing calls for the resignation of Finance Minister Taro Aso over his ministry’s involvement in altering documents in a controversial land sale. The buyer of the land was a private-school operator allegedly tied to Prime Minister Shinzo Abe’s wife.
Tech stocks logged gains after Nasdaq’s COMP, +0.36% record close overnight, its second in a row. Samsung Electronics 005930, +3.86% was up 2.5% in Seoul, helping push up the Kospi SEU, +0.42% 0.2%, while Taiwan’s Taiex benchmark Y9999, +0.85% gained 0.9%, buoyed by gains of 2% or more for Apple suppliers Largan Precision 3008, +2.28% and Taiwan Semiconductor 2330, +1.97% .
“For a number of tech companies, the momentum is still there,” said Pictet Wealth Management’s Gaud. Particularly in China, names in the mobile-internet space remain favored. “Overall in our strategies, we have maintained full exposure to those sectors.”
On mainland China, Shanghai stocks SHCOMP, -0.49% were down 0.3% after news the country plans to merge its banking and insurance regulators. Beijing has previously tightened the screws on stock-market investing by companies in these two sectors. Stocks in Shenzhen 399106, -0.71% were largely flat after regaining ground from a weak start.
Australia’s S&P/ASX 200 XJO, -0.36% slipped led regional declines, falling 0.4% on weakness in major mining and oil stocks. BHP Billiton BHP, +0.40% BLT, +0.64% BHP, -0.83% and Rio Tinto RIO, -1.96% RIO, +0.29% RIO, +0.82% were down 0.8% and 2.0% respectively, while Woodside fell 0.3% after Monday’s fresh drop in oil prices. Banks also took a hit from the start of an inquiry into financial industry misconduct.
Commodity prices were lower, with oil futures down 0.3%. In Hong Kong, Chinese oil explorer and producer Cnooc 0883, -1.90% was down 2.4%.
New Zealand stocks traded higher throughout the day with the NZX 50 NZ50GR, +0.11% ending at a second-straight record close.
S&P futures ESM8, +0.15% were up 0.05%, suggesting a muted start also for U.S. stocks.