SINGAPORE- Asian stocks rose to their highest in more than a month on Tuesday, underpinned by a broad recovery on Wall Street while the euro was stuck near a one-week low against the dollar amid talk of more sanctions against Moscow.
MSCI’s broadest index of Asia-Pacific shares outside Japan built on early gains and advanced 0.3 percent to 602.2, the strongest since Feb. 24.
The benchmark has lost 4 percent so far this year, dragged by big declines in Chinese shares, while the Russia-Ukraine crisis has also hurt the near-term outlook.
The United States and Europe were planning new sanctions to punish Moscow over civilian killings in Ukraine, and President VolodymyrZelenskiy warned more deaths were likely to be uncovered in areas seized from Russian invaders.
“Geopolitical shocks historically did not tend to dominate the markets for long. The start of Fed tightening should not be seen as a negative for stocks, at least not in the early stages,” global markets strategists at JPMorgan said in a note.
“Post the initial volatility, equities tended to make new all-time highs,” JPMorgan said, adding that autos, airlines and banks could recover as “geopolitics stops driving the market narrative.”
European stocks were headed lower as EUROSTOXX 50 futures eased 0.1 percent and FTSE futures dipped 0.2 percent.
S&P 500 stock futures shed 0.08 percent and Nasdaq futures slipped 0.05 percent after Wall Street rose on Monday, supported by tech shares.
Global stocks have had a volatile quarter as the Russia-Ukraine crisis and worries over higher commodity prices fuel inflation concerns and cloud the direction of interest rates.
“Profit reporting season in the US kicks off next week and it will be interesting to see how firms are interpreting the tea leaves, and whether earnings guidance is revised down,” Tapas Strickland, director of economics and markets at NAB, said in a note.
