HONG KONG- Asian shares traded cautiously on Tuesday, with investors weighing China’s measures to cushion an economic slowdown and the prospect of aggressive Federal Reserve monetary policy tightening.
Investors are also bracing for a barrage of earnings that will help them assess the impact of the Ukraine war and a spike in inflation on company financials. Netflix, Tesla and Johnson & Johnson are all to report this week.
Moscow has refocused its ground offensive in Ukraine’s two eastern provinces but Ukrainian President VolodymyrZelenskiy has vowed to fight on.
Early in the Asian trading day, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.5 percent while US stock futures, the S&P 500 e-minis, were up 0.2 percent.
Australia’s S&P/ASX 200 edged up 0.66 percent, as strong commodity prices lifted mining and energy stocks, while Japan’s Nikkei rose 0.18 percent.
China’s blue-chip CSI300 index was 0.06 percent higher in early trade while the Shanghai Composite Index rose 0.24 percent. Hong Kong’s Hang Seng index opened down 2.4 percent, pressured by a slump in tech giants listed in the city amid China’s latest regulatory crackdown on the sector.
The People’s Bank of China (PBOC) said on Friday it would cut the reserve requirement for all banks by 25 basis points (bps), releasing about 530 billion yuan ($83.25 billion) in long-term liquidity to cushion a slowdown.
Investors, however, felt the smaller-than-expected cut might not be enough to reverse a sharp slowdown in the world’s No. 2 economy that could significantly affect global growth.
China’s gross domestic product (GDP) on Monday beat analysts’ expectations with a 4.8 percent increase in the first quarter from a year earlier, while data on March activity showed weakness in consumption, property and exports affected by COVID-19 curbs.
Analysts said the key question was whether authorities would make adjustments to the tough anti-COVID-19 measures.
