Asian Stocks Up, Investors Continue Monitoring COVID

© Reuters.

By Gina Lee

– Asia Pacific stocks were mostly up on Tuesday morning, with investors continuing to monitor the global economic recovery from COVID-19.

Japan’s Nikkei 225 rose 0.93% by 9:01 PM ET (2:01 AM GMT), with the Bank of Japan handing down its interest rate later in the day.

South Korea’s KOSPI inched down 0.04% while in Australia, the ASX 200 edged up 0.19%.

Hong Kong’s Hang Seng Index gained 0.52%.

China’s Shanghai Composite was up 0.37% while the Shenzhen Component was down 0.51%. Chinese shares were in the spotlight on Tuesday as investors continued to digest the policy rate cuts from the People’s Bank of China (PBOC) from the day before. The central bank lowered the rate on its one-year policy loans by 10 basis points to 2.85% and cut the rate on the seven-day reverse repurchase agreements to 2.1% from 2.2%.

The PBOC moves triggered expectations of further monetary easing, contrasting with the series of interest-rate hikes widely expected from the U.S. Federal Reserve within 2022.

Meanwhile, central banks in Indonesia, Malaysia, Norway, Turkey, and Ukraine will hand down their policy decisions on Thursday.

U.S. markets will re-open later in the day after a holiday. Global shares have slipped in the year to date, thanks to a retreat in U.S. shares. Investors are now waiting to see whether company profits could improve sentiment, despite inflation and other challenges posed by the omicron COVID-19 variant.

“It will be interesting to see if investors are tempted back in now that earnings season is underway,” OANDA senior market analyst Craig Erlam said in a note.

The emergence of omicron may mean that many companies don’t enjoy the kind of performance that was expected before, but that doesn’t mean there won’t be plenty of positives to take away.”

Global corporate earnings will deliver significant beats in 2022, again defying doomsayers and skeptics, according to JPMorgan Chase & Co. strategists. To gauge that prediction’s accuracy, investors will be looking to earnings from Goldman Sachs Group Inc. (NYSE:GS), Morgan Stanley (NYSE:MS), Bank of America Corp. (NYSE:BAC), UnitedHealth Group Incorporated (NYSE:UNH), and Netflix Inc. (NASDAQ:NFLX), due throughout the week.

Investors also await U.S. data, including the Empire State manufacturing index, due later in the day. Further data, including building permits, will be released a day later.

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