HONG KONG- Asian stocks rose in cautious trade on Tuesday, with investors choosing to focus on corporate earnings prospects and the resilience of the US economy ahead of tensions in the Middle East.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.4 percent . Tokyo’s Nikkei rose 1 percent .
Overnight the S&P 500 had climbed 1 percent , while oil prices and the US dollar had fallen.
A host of “favorable” signs from the strength of the US consumer, economic growth, and interest rates supporting bank profits, gave reasons for hope, said Kerry Craig, a global market strategist at J.P. Morgan Asset Management.
Quarterly results from Goldman Sachs and Bank of America are due on Tuesday, with Morgan Stanley pharmaceutical giant Johnson & Johnson Tesla and Netflix due later in the week.
A recent shift in tone from Federal Reserve officials – hinting that interest rate hikes might be over – has also cheered investors and bond markets lately.
Benchmark 10-year Treasury yields are about 15 basis points off 16-year highs, though they crept higher in Asia trade Tuesday to 4.7331 percent .
Investors are also trying to assess risks that a wider conflict breaks out in the Middle East which remains a “very fluid situation”, Craig said.
US President Joe Biden will visit Israel on Wednesday as the country prepares to escalate an offensive against Hamas militants that has set off a humanitarian crisis in Gaza and raised fears of a broader conflict with Iran.
Iran’s Foreign Minister said Israel would not be allowed to act in Gaza without consequences, warning of “preemptive action” by the “resistance front” in the coming hours.
Israel’s shekel weakened beyond 4-to-the-dollar for the first time since 2015 on Monday, as it bears some of the brunt of worry and uncertainty about the Gaza situation.
