SINGAPORE- Asia’s stockmarkets struggled to carry recent gains into a fourth straight session on Wednesday and the US dollar steadied, as nagging doubts about inflation and the drag from rate rises crept back in to the global growth outlook.
MSCI’s broadest index of Asia-Pacific shares outside Japan gave up earlier gains to trade around flat by mid-morning. Japan’s Nikkei rose 0.3 percent although miners did help Australian shares up about 0.7 percent. .
Overnight Wall Street indexes had jumped and the dollar recoiled from near two-decade highs as investors pushed worry about inflation and recession to the back of their minds.
But analysts doubted it could last and by the time Asian traders had woken up US stocks had run out of steam. S&P 500 futures were down 0.2 percent early in the Asia session and Nasdaq futures were down 0.4 percent.
“After plunging into last week, shares could have a further near-term bounce,” said Shane Oliver, chief economist and head of investment strategy at Australia’s AMP Capital.
“But risks around inflation, monetary tightening, the war in Ukraine and Chinese growth remain high and still point to more downside in share markets,” he said.
The dollar also steadied after an overnight kicking, helped by Australian wages data missing forecasts, which pulled down the Aussie dollar.
The greenback steadied on the euro at $1.0536 and paused a strong bounce for sterling at $1.2480. The dollar index hovered at 103.370.
“It’s still far too early to call a long term peak in the dollar and retracements should be shallow,” said analysts at Westpac. “But some two-way consolidation between 102-104 is likely near-term,” they added, referring to the dollar index. – Reuters
