Asia Pacific Shares

Asia-Pacific Shares Tentatively Higher as investors Weigh Potential Impact of US CPI, Earnings Data

The major Asia-Pacific stock indexes settled lower on Tuesday with shares in China bucking the trend. With little guidance from Wall Street, investors paid close attention to U.S. Government bond yields which could be tested later today by what should be strong readings for U.S. inflation. Later in the week, investors will be guided by U.S. earnings and retail sales. The major worry is whether U.S. earnings justify the current sky-high valuations.

Cash Market Performance

In the cash market on Tuesday, Japan’s Nikkei 225 Index settled at 29751.61, up 212.88 or +0.72%. Hong Kong’s Hang Seng Index is trading 28550.22, up 96.94 or +0.34% and South Korea’s KOSPI Index finished at 3169.08, up 33.49 or +1.07%.

China’s Shanghai Index is trading 3394.10, down 18.85 or -0.55% and Australia’s S&P/ASX 200 Index closed at 6976.90, up 2.90 or +0.04%.

China’s Exports Missed Forecast in March, while Imports Rose More than Expected

China on Tuesday reported March exports data that missed analyst forecasts while imports for the month rose more than expected.

Chinese exports last month jumped 30.6% from a year ago in U.S. Dollar terms, lagging the 35.5% increase that analysts polled by Reuters had expected. Meanwhile, the country’s imports in U.S. Dollar terms rose 38.1% in March from a year ago, exceeding the 23.3% increase those analysts had forecast.

The stronger-than-expected rise in imports led China’s trade surplus to shrink to $13.8 billion in March, much narrower than the Reuters poll’s forecast of $52.05 billion.

Nikkei Gains as Glass Firms, Department Stores Shine on Upbeat Earnings

Japanese shares rose on Tuesday, led by gains in stocks of glass product companies and department store operators after their robust earnings, though concerns about rising domestic COVID-19 cases undermined travel-related shares.

AGC rose 2.9%, briefly hitting a 10-year high, after the glass product maker revised up its earnings outlook and dividend forecasts. The results also bumped up rival Nippon Sheet Glass 6.8%.

Takashimaya gained 4.3% after the department store chain operator announced a larger-than-expected profit in the current financial year after a dismal year hit by the pandemic.

“Today’s moves were mostly reactions to individual earnings. Overall, the market does not have a clear sense of direction at the moment, as investors looked to whether the Fed will start communication about tapering its stimulus,” said Nobuhiko Kuramochi, senior strategist at Mizuho Securities.

South Korean Stocks Rise on Tech Boost, Foreign Buying

South Korean shares rose on Tuesday, boosted by tech heavyweights and buying by foreigners, although some investors were cautious ahead of U.S. corporate earnings and inflation data.

Foreigners were net buyers of 182.8 billion won ($162.37 million) worth of shares on the main board.

In other news, the Bank of Korea is widely expected to keep interest rates at all-time lows on Thursday, as signs of a solid economic recovery are offset by concerns over a recent spike in domestic COVID-19 cases and a slow rollout of vaccines.

For a look at all of today’s economic events, check out our economic calendar.

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James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.