Asian counterparts trade mixed while Sensex and Nifty remain quiet at market open.
Amidst mounting rumors that the central bank may modify its policies during its meeting next week, Japanese stocks experienced a second day of declines. South Korean and Australian stocks increased.
Following a media report stating that policymakers will eliminate negative interest rates this month if wage data comes out well, Japan’s 10-year yield surged to its highest level in three months. Early Tuesday producer price data exceeded forecasts.
If the spring wage discussions result in an increase of more than 4%, there’s a good probability that the BOJ would reverse its negative-rate policy, according to Kelvin Tay, chief investment officer at UBS Global Wealth Management in Singapore.
For a third day, Hong Kong equities rose, while China Vanke Co., a state-backed developer, saw a dip after Moody’s Ratings downgraded the company’s investment-grade credit rating and issued a warning about possible additional downgrades.
Asia’s steel industry saw a decline in share prices as iron ore saw its largest decline since 2022.
US market futures increased following Monday’s slightly lower closings for the Nasdaq 100 and the S&P 500. Investors are looking for more information to determine whether the recent spike in US consumer prices was a one-time event or a sign that the disinflationary trend has encountered a barrier.
According to a New York Fed study, US consumers’ estimates for inflation over the next three years increased in February. These numbers were released ahead of statistics on Tuesday, which is anticipated to indicate that inflation decreased just somewhat last month, which is why US authorities are taking their time lowering interest rates.
Following their Monday decline, Treasuries were essentially unchanged as traders prepared for yet another round of aggressive sales of high-grade corporate junk. Comparing the dollar to most of its Group-of-10 counterparts, it declined marginally.
Only four CPI reporting days in the last 12 months have seen a decline in the S&P 500, but during those sessions, volatility has increased. Based on data provided by Bloomberg, the stock gauge has moved approximately 0.8% in either direction on the day that the CPI was issued over the last six months. That is an increase from September’s less than 0.5%.
It’s conceivable that investors are factoring in a lot of positive news early on, causing stock prices to rise ahead of additional information that confirms the soft-landing story.
Following a three-day decline, oil slightly increased ahead of a number of market releases and US inflation statistics. For the first time, Bitcoin broke beyond $72,000 as it rose for a sixth day thanks to inflows into US exchange-traded funds.
In other news, the central bank of Argentina abruptly lowered its benchmark interest rate from 100% to 80%.
Tuesday’s muted to negative opening of Indian benchmark indices was caused by poor signals from Asian counterparts that were trading in a range ahead of the US inflation data that was scheduled to be announced later in the day.
The Nifty was down 2.85 points, or 0.01%, at 22,329.80, and the Sensex was down 28.84 points, or 0.04%, at 73,473.80 at the opening bell.