Asia markets mostly retreated yesterday as investors returned to trading floors after the long Easter break, with attention turning to a speech by US Federal Reserve chief Janet Yellen.
After a broadly upbeat month across all asset classes – which saw healthy gains after the sharp sell-offs of January and February – investors also looked to cash in before closing their positions by the end of the financial year.
A string of easing measures from central banks around the world provided some much-needed support over March. There are also hopes Yellen will shed some light on the Fed’s thinking about its interest rate policy in her speech in New York yesterday.
A recent series of strong US data – including Friday’s better than forecast fourth-quarter growth - raised the prospect of a lift sometime soon, although disappointing inflation and consumer spending figures on Monday dampened expectations again.
Tokyo’s Nikkei closed 0.2% down, while Shanghai finished 1.3% lower. Sydney shed 1.6% and Singapore was also lower. However, Hong Kong ended 0.1% higher in late buying on the first day back after the Easter break.
The uneasy start to the week came after a largely positive but soft lead from Wall Street. “Much of Wall Street’s rebound, and indeed that of global markets, over the last five weeks has been driven by expectations for continued policy accommodation from the world’s central banks,” Matthew Sherwood, head of investment strategy at Perpetual in Sydney, told Bloomberg News.
“It is no surprise that the market rally is showing signs of fatigue. A weak recovery despite record stimulus remains a tough environment for risk markets.”
Also on the agenda this week is the release on Friday of a US jobs report that will give further insight into the state of the world’s top economy.
Oil prices this month have predominantly seen strong gains – breaking above $40 at one point - on hopes of a deal to freeze output. But they edged down again Tuesday, with US benchmark West Texas Intermediate 0.8% lower and Brent shedding 0.9%.
Analysts said the ongoing supply glut that has scythed prices since mid-2014 as well as weak demand continue to weigh on the commodity, while a report this week is expected to show another rise in US stockpiles.
In early European trade, London and Frankfurt gained 0.5% and Paris added 0.6%.
In Tokyo, the Nikkei 225 down 0.2% at 17,103.56 points; Shanghai – Composite down 1.3% at 2,919.83 points and Hong Kong - Hang Seng up 0.1% at 20,366.30 points at the close yesterday.