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© Reuters.
By Gina Lee
Investing.com – Asia Pacific stocks were mostly down on Monday morning. However, investors started the fourth quarter of 2021 on a cautiously optimistic note as they hope for a pickup in economic growth to override inflation pressure concerns.
Japan’s Nikkei 225 fell 1.27% by 9:55 PM ET (1:55 AM GMT) and Hong Kong’s Hang Seng Index slid 2.31%. In Australia, the ASX 200 rose 0.81%.
South Korean and Chinese markets were closed on Monday.
In the U.S., the S&P 500 rose over 1% Friday after Merck & Co .'s (NYSE:MRK) COVID-19 pill showed promising results, and the U.S. Institute of Supply Management (ISM) Manufacturing Purchasing Managers index, released on Friday, was a better-than-expected 61.1 for September.
The dollar declined for a third day, with tensions in Asia, alongside U.S.-China tensions, high due to a record number of flybys by Chinese warplanes close to Taiwan. Benchmark U.S. Treasury 10-year yields slipped to 1.45%.
“The greenback’s rally has stretched the momentum indicators, and a correction/consolidative phase seems likely ahead of the latest U.S. jobs report” due on Friday, Bannockburn Global Chief Market Strategist Marc Chandler told Bloomberg.
Investors in Asia Pacific will also be monitoring the news from China Evergrande Group (HK:3333), whose debt woes continue. Investors will also be awaiting comments from an Organization of the Petroleum Exporting Countries and allies meeting, taking place later in the day, as crude prices continue to soar.
With fears of a slowing economic recovery from COVID-19 continuing to mount, the U.S. jobs report will be a focal point for investors. Global shares had their worst month since March 2020 in September over concerns about rising inflation, supply-chain bottlenecks, a growing global energy crisis, and a slowdown in China’s economic recovery.
However, some investors remained cautiously optimistic, pointing out historical patterns where stocks tend to show strength nearer the end of a year.
“Investors need to be mindful of seasonal market strength. When the fourth quarter is ugly, it tends to be really ugly, but if it is strong, it tends to be quite strong,” Tallbacken chief executive officer Michael Purves told Bloomberg.
In central bank news, the Reserve Bank of Australia will hand down its policy decision on Tuesday, followed by the Reserve Bank of New Zealand a day later. The Reserve Bank of India will round up the week when it hands down its decision on Friday.
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