Miners lead gains as war and rate hikes rattle nerves

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HONG KONG — Gains in banks, energy and mining stocks lifted Asian stocks a little higher on Tuesday as investors braced for aggressive U.S. rate hikes and war disrupting oil supplies .

Oil futures rose nearly 3% to a two-week high in Asia.

The yen broke the key 120 level against the dollar for the first time since 2016 and Treasuries extended losses after US Federal Reserve Chairman Jerome Powell announced more aggressive policy tightening on Monday. monetary than expected.

MSCI’s broadest Asia-Pacific non-Japan equity index rose 0.2%, led by gains in Australia’s heavy index of miners and banks

The Japanese Nikkei rose 1.7% to 27,276.

“This very strong commodity price spike actually has relatively mixed impacts…because we have notable commodity exporters in this region who could possibly benefit,” said Manishi Raychaudhuri, Asia equity strategist. – Pacific at BNP Paribas.

Meanwhile, “investors accept that central banks in developed markets would normalize monetary policy,” he said.

Powell had sparked a bond rout overnight after telling the National Association for Business Economics that the US central bank was ready to do what it took to fight inflation and that bigger hikes than usual would be deployed if necessary.

Treasuries and US equity futures remained on edge, with S&P 500 futures down 0.3% and rate-sensitive Nasdaq 100 futures down 0.4%. Benchmark 10-year Treasury yields hit a near three-year high of 2.3330%.

Fed funds futures now price two-thirds of the chance of a 50 basis point rate hike in May.

The Japanese yen, also sensitive to rising US rates, briefly dipped past 120 to the dollar and last bought 119.90.

Chinese markets, on the other hand, are awaiting policy easing after being flagged by authorities last week.

China’s blue chip index opened 0.2% lower while Hong Kong’s benchmark Hang Seng index rose 0.7%.

Hong Kong shares of China Eastern Airlines fell 5.5% after its Boeing 737-800 with 132 people on board crashed in the mountains of southern China on Monday.

Meanwhile, the lack of progress in peace talks between Russia and Ukraine continued to weigh on sentiment. The conflict raged as Ukraine said on Monday it would not obey Russia’s ultimatums after Moscow demanded it stop defending beleaguered Mariupol.

Oil futures extended gains Tuesday morning after some members of the European Union considered imposing sanctions on Russian oil and attacks on Saudi oil facilities sparked jitters in the market.

Brent crude rose 2.9% to $118.93 a barrel. U.S. crude rose 2.4% to $114.85 a barrel.

The yen fell about 0.4% to briefly hit 120.08 to the dollar at the start of Asian trading.

In other currency trading, the euro fell 0.2% on the day to $1.0992, after losing 2.09% in a month, while the dollar index, which trails the greenback against a basket of currencies of other major trading partners, rose to 98.758.

Gold was slightly lower at $1930.27 an ounce.

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