HONG KONG- Asian shares inched up on Tuesday morning as positive economic data and hints of easing Sino-US tensions offered some respite to the recent sell-offs, though persistent fears about a global recession and sky-high inflation kept most buyers at bay.
MSCI’s gauge of Asia Pacific stocks outside Japan was up 0.3 percent, having erased part of the early morning gains.
The index has fallen 16 percent so far this year, as worries that central banks around the world will push economies into recession to break red-hot inflation have sent investors running for cover.
Offering brief respite to nervous markets was a report that US president Joe Biden was leaning towards a decision on easing tariffs on goods from China as well as news Chinese vice premier Liu He had spoken to US Treasury Secretary Janet Yellen, said Redmond Wong，market strategist at Saxo Markets Hong Kong.
A survey showing China’s services activity at the fastest pace in almost a year also helped sentiment, he said.
Overnight the Wall Street Journal reported Biden was contemplating rolling back some tariffs on Chinese imports in an effort to slow inflation.
Chinese shares, however, were volatile, and gave up their early gains, with blue chips last down 0.6 percent.
There was also positive data from Japan where the country’s services sector activity expanded at the fastest pace in over eight years in June as the easing of coronavirus curbs boosted sentiment among businesses such as those in tourism, helping the Nikkei to rise 0.8 percent.
Referring to the global growth and inflation dynamics, Saxo Markets’ Wong said: “Market participants are still assessing the impact of the tug of war between inflation being at persistently elevated levels and signs pointing to potentially an incoming US recession.”
Those concerns were front and center in South Korea, where June inflation accelerated to the fastest pace since the Asian financial crisis, fanning expectations the central bank could deliver a 50 basis point rake hike for the first time next week to cool prices. – Reuters
