SINGAPORE- Asian shares edged up on Tuesday thanks to a bounce in battered Chinese markets, but elsewhere investors were cautious amid diminishing expectations of a near-term Federal Reserve rate cut, which in turn underpinned the dollar.
The Australian dollar jumped after the country’s central bank retained a tightening bias at the conclusion of its policy meeting and warned against imminent rate cuts, joining the Fed chorus of caution.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose more than 0.8 percent , reversing a 0.7 percent decline from the previous session.
That was helped by a sharp rise in Chinese stocks, as recent signs of support from state-backed investors and moves from authorities helped stem heavy losses in the market.
The blue-chip CSI300 Index jumped more than 1.5 percent , while Shanghai Composite Index gained 0.8 percent , after having plumbed a five-year low on Monday.
China’s state fund Central Huijin Investment said on Tuesday it has expanded its scope of investment in exchange-trade funds (ETFs), according to a statement on its website.
The same day, China’s securities regulator said it will guide institutional investors to raise stock investment and encourage listed companies to increase share buybacks.
“We estimate the National Team has bought roughly RMB 70 billion of A shares in the past month, but RMB 200 billion is perhaps the minimum to stabilize the market,” said analysts at Goldman Sachs, referring to the coined term for Chinese state-backed investors.
Hong Kong’s Hang Seng Index surged more than 3 percent , while Japan’s Nikkei slid 0.22 percent .
Data on Monday showed the US services sector growth picked up in January as new orders increased and employment rebounded, adding to growing doubts about the slew of Fed rate cuts priced in for this year, which had already been dialed back in the wake of Friday’s blockbuster US jobs report.
That kept the dollar propped close to more than a two-month high against the euro and the yen
The single currency last bought $1.0750, while the yen stood at 148.41 per dollar.
