Asian stocks stagnate as investors await more rate action

People walk past an electronic screen showing Japan’s Nikkei stock price index at a conference room in Tokyo, Japan June 14, 2022. REUTERS/Issei Kato/File Photo

HONG KONG, Sept 6 (Reuters) – Asian stocks largely wiped out early morning gains on Tuesday afternoon as investors remained cautious ahead of a European Central Bank meeting this week while monitoring the fallout from Russia’s gas cut. .

U.S. stocks are set to open higher on Tuesday after Monday’s Labor Day break, with E-mini futures for the S&P 500 index up 0.31%.

FTSE futures fell 0.2%, however, indicating a choppy start in London. European stock indices fell on Monday, the euro fell below 99 cents for the first time in twenty years and gas prices in Europe jumped after Russia said its main gas pipeline to Europe would remain closed . Read more

The MSCI gauge of Asia-Pacific equities ex-Japan (.MIAPJ0000PUS) was up 0.02% at 0532 GMT. Japan Nikkei 225 (.N225) was 0.03% higher.

The Chinese benchmark CSI300 (.CSI300) rose 0.58%, after the country’s policymakers pledged on Monday to step up efforts to stimulate the COVID-hit economy. Hong Kong’s Hang Seng Benchmark (.HSI)however, slipped 0.07%. Read more

The yuan also rebounded from a more than two-year low against the US dollar, after the central bank said it would cut the foreign reserve ratio to support the currency. Read more

“Bulk commodities will depend on the impact of the Chinese stimulus and the success of that will be reflected in the major miners,” said John Milroy, investment adviser at Ord Minnett.

Australian S&P/ASX 200 (.AXJO) fell 0.36%, after the Reserve Bank of Australia (RBA) raised the cash rate by 50 basis points. Read more

The European Central Bank will meet on Thursday to discuss action on interest rates. A US Federal Reserve meeting will follow on September 21.

“The surge in inflation will likely see the ECB deliver another outsized rate hike on Thursday,” analysts at Commonwealth Bank of Australia said.

EU energy ministers are due to discuss measures to cut electricity prices at an emergency meeting on Friday.

“There is a feeling that the next 75 basis point rise in September will see a deceleration thereafter,” said Sean Darby, global head of equity strategy for Hong Kong-based Jefferies.

Oil prices fell on Tuesday, paring the previous session’s 3% gain, as an agreement among members of the OPEC+ group to cut production by 100,000 barrels a day in October was seen as a largely symbolic move to stem the recent market crash.

Brent crude futures fell 0.7% to $95.07 a barrel, compounding morning losses. U.S. crude futures, however, were still up 2.12% at $88.71 a barrel.

Spot gold rose 0.49% to $1,718.2 an ounce.

The dollar index edged down 0.06% after hitting a 20-year high in the previous session.

Reporting by Kane Wu in Hong Kong; Editing by Bradley Perrett

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