Asia-Pacific shares are expected to open lower on Wednesday with traders taking their cues from a steep plunge in mega-cap growth shares on Wall Street. Investors dumped the higher risk tech shares for protection in more defensive parts of the market.
All 11 major S&P 500 sectors were down, with technology communication services and consumer discretionary falling more than 2% each. Meanwhile, the defensive consumer staples, utilities and real estate sectors fell the least.
Stocks in the Asia-Pacific region were mixed on Tuesday with major markets in Japan and China still closed for bank holidays.
Hong Kong’s Hang Seng index settled 0.70% higher. South Korea’s KOSPI Index was up 0.64% and China’s Shanghai Index finished down 0.81%. In Australia, the S&P/ASX 200 Index closed up 0.56%.
Investors Eyeing COVID-19 Outbreak in India
Investors continued to monitor the COVID-19 situation in India as it shows little signs of slowing down. The World Health Organization said last week that one in every three new coronavirus cases globally is being reported in India.
Reserve Bank of Australia Holds Policy Steady
The Reserve Bank of Australia (RBA) left its key rates at near zero for a fifth straight meeting on Tuesday and pledged to keep policy supper loose for a prolonged period even as the economy recovers at a rapid pace from the COVID-19-led downturn.
The RBA reiterated its commitment to keep the cash rate at the record-low of 0.1% for as long as is needed to pull down unemployment and push inflation higher.
The RBA’s as-expected decision comes as it painted a rosy picture of the A$2 trillion ($1.55 trillion) economy, and upgraded the growth forecast to 4.75% over 2021, from its February forecast of 3.5%.
Australia Shares Rise as Central Bank Upgrades Growth Forecast
Australian shares closed higher on Tuesday as the central bank raised its economic growth forecast and kept interest rates on hold, with commodity-related stocks leading the way on the benchmark index.
Gold and mining stocks led the gains on strong metals prices, while tech stocks lost ground. The metals and mining index climbed 2.3%. Big miners BHP Group and Rio Tinto added 2.6% and 2.5%, respectively.
Energy Leads Hong Kong Stocks Higher on Pandemic Recovery Signs
Hong Kong shares settled higher on Tuesday, with energy stocks leading the gains on signs of recovery from the coronavirus pandemic as major economies around the world reopen.
The sub-index of the Hang Seng tracking energy shares rose 2.3%, while the IT sector edged up 0.05%, the financial sector climbed 0.78% and the property sector gained 0.52%.
For a look at all of today’s economic events, check out our economic calendar.