Asia report: Most markets rise after mixed day on Wall Street

(Sharecast News) - Markets across the Asia-Pacific region ended mostly higher on Tuesday, buoyed by gains in China and Hong Kong, even as Japan's indices struggled under the weight of a tech selloff. The moves came after a mixed session on Wall Street, where the Dow Jones Industrial Average rose while the Nasdaq Composite slipped due to continued selling in major tech stocks.

"After the S&P 500 index dramatically wiped out almost all its post-election gains, rattled by a bond market spooked by soaring inflation and climbing interest rates, the downturn was further fueled by president-elect Donald Trump's aggressive economic agenda," said SPI Asset Management managing partner Stephen Innes.

"In this volatile environment, investors cautiously dipped back into the market, sensing an opportunity.

"This sparked a spirited rebound in the Dow and S&P, driven by the sturdy fundamentals of the US economy."

Amid the turmoil, Innes said investors were cautiously moving away from tech stocks, gravitating towards sectors less susceptible to economic shifts while "clinging to the remnants" of a feel-good market vibe.

"Overnight, the dollar surged to a fresh 26-month high, tightening financial conditions both domestically and internationally, though it has since slightly retreated, potentially offering some respite for Asian markets today.

"The dollar's strong start to the week continues its impressive streak, rising 14 out of the last 15 weeks and appreciating 10% against major G10 currencies.

"This relentless climb is exerting significant pressure on emerging and Asian economies, which are feeling the pinch from both the robust dollar and rising Treasury yields."

Most markets in the green with Japan the exception

In Japan, the Nikkei 225 fell sharply on returning from a holiday on Monday, by 1.83% to 38,474.30, driven by steep losses in tech-heavyweights such as Advantest Corporation, which plunged 9.21%.

The broader Topix index also declined by 1.16% to 2,682.58.

Conversely, Chinese markets posted robust gains, with the Shanghai Composite climbing 2.54% to 3,240.94, and the Shenzhen Component surging 3.77% to 10,165.17.

Optimism around domestic growth supported significant rallies in some Shanghai stocks, with Suzhou Harmontronics Auto Tech and Shanghai Huili Building Materials both gaining over 10%.

Hong Kong's Hang Seng Index rose 1.83% to close at 19,219.78, bolstered by strong performances from consumer and tech stocks.

Nongfu Spring, JD.com, and Meituan were among the top gainers, each rising over 5%.

South Korea's Kospi 100 edged up by 0.12% to 2,494.36, supported by notable increases in industrial and consumer goods companies such as LF Co and Hanwha Ocean.

In Australia, the S&P/ASX 200 gained 0.48% to 8,231.00, with Ingenia Communities Group soaring 15.04%.

Whitehaven Coal and Lovisa Holdings also contributed to the day's gains.

Across the Tasman Sea, New Zealand's S&P/NZX 50 rose 0.44% to 12,884.38, led by modest gains in Mercury NZ and Eroad.

Currency movements were mixed, with the dollar last 0.28% stronger on the yen to trade at JPY 157.92, while it weakened 0.25% against the Aussie to AUD 1.6149, and retreated 0.52% from the Kiwi, changing hands at NZD 1.7817.

Oil prices remained relatively stable, with Brent crude futures last up 0.16% on ICE to $81.14 per barrel, and the NYMEX quote for West Texas Intermediate ahead 0.28% at $79.04.

Japanese bond yields reach new highs ahead of BoJ policy meeting

Japanese government bond yields reached significant milestones on Tuesday, reflecting a global selloff in sovereign debt.

The 10-year benchmark yield climbed to 1.239%, its highest level since April 2011, while the 40-year bond yield hit 2.755%, the highest on record since 2007.

At the same time, the Bank of Japan's monetary policy was drawing attention as deputy governor Ryozo Himino indicated potential changes at next week's policy meeting.

Speaking to business leaders in Yokohama, Himino suggested that the central bank would consider raising interest rates based on updated growth and inflation forecasts.

He noted that surveys and regional reports pointed to sustained wage growth - a critical factor in driving inflation closer to the bank's target.

Reporting by Josh White for Sharecast.com.