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Asian markets mostly up but investors remain wary

Asian markets mostly up but investors remain wary

HONG KONG, Feb 13: Asian markets mostly rose Tuesday, tracking another rally in New York after last week's battering, but early gains were tempered and Tokyo ended down on lingering uncertainty and worries about further turmoil, reports AFP. While some stability has returned to trading floors investors are keeping a nervous eye on the release this week of key US inflation data, which many fear could spark another round of blood-letting. Global markets have been sent into spasms this month as the yield on US Treasury bills has risen to four-year highs, with Federal Reserve interest rates expected to be hiked further this year owing to a purring economy and rising wages. There are also warnings that the yield on US T-bills could spike to 3.5 percent, according to Bloomberg News, which would mark a level not seen since 2010. But Asian traders were on Tuesday broadly optimistic, though they pared morning gains. Hong Kong rose 1.6 percent and Shanghai finished one percent higher as dealers in China begin to wind down ahead of the long Lunar New Year break. Sydney climbed 0.6 percent, Singapore jumped more than one percent and Seoul was up 0.4 percent. Jakarta, Manila, Bangkok and Wellington were also well up. Tokyo stocks closed at a four-month low Tuesday on late profit-taking and a strong yen, giving up an early rally as investors stayed cautious despite two days of gains on Wall Street. The benchmark Nikkei 225 index fell 0.65 percent or 137.94 points, to 21,244.68, while the broader Topix index was down 0.88 percent or 15.19 points, at 1,716.78. The Nikkei had opened on a positive note, tracking US stocks on bargain-buying last week's battering. Wall Street has been under pressure since a strong jobs report at the start of the month sparked fears the Federal Reserve will accelerate the pace of interest rate hikes to stave off inflation. But the bellwether Tokyo index fell into negative territory in afternoon trade on profit-taking. "Some players cashed in on early gains in late trading, which proved investors remained cautious despite the gains on Wall Street," Hikaru Sato, senior technical analyst at Daiwa Securities, told AFP. A strong yen also depressed market sentiment, Sato added. The dollar was trading at 108.09 yen against 108.64 yen in New York and experts warned that volatility was likely to continue. "The Japanese stock market will face large price movements this week too," Okasan Online Securities said in a note. "The market ... will have some more swings until volatility subdues," it said. Banks lost early gains as Mizuho closed 0.91 percent lower at 195.9 yen with Mitsubishi UFJ Financial down 1.46 percent at 767.4 yen. Fujifilm plunged 3.22 percent to 4,316 yen after media reports activist investor Carl Icahn was against a proposed takeover of Xerox. The Japanese technology group announced last month it would combine Fuji Xerox with US giant Xerox, bringing both companies under its umbrella to create what it said was the world's largest "document solutions company" by revenue. Sony sank 1.44 percent to 5,099 yen and Toyota dropped 2.53 percent to 7,276 yen. Dealers were given a positive cue from Wall Street and Europe, where all major indexes finished more than one percent higher. Stephen Innes, head of Asia-Pacific trading at OANDA, said: "Equity markets have begun the week on a somewhat positive note picking up from Friday's rebound as bargain hunters have returned on the first sign of stability. "The market is trying to find a positive equilibrium, and if we can get through this week's critical US (inflation data) relatively unscathed, then it would most certainly look as if last week was little more than a corrective episode rather than the commencement of a bear market." However, there is concern that another strong reading could spark more frenzied selling. And Ronald Wan, chief executive at Partners Capital in Hong Kong, told Bloomberg News the recent record highs witnessed in many cities would not be seen again for a while. "People didn't take the US stocks decline seriously in the beginning," he said. "Global equities were at their peaks and people also ignored whether the elevated level" was supported enough by the economy. "The peak of this bull market" is behind us, he added. On currency markets the dollar continued to struggle against the yen on lingering uncertainty, with investors seeking solace in the safe-haven Japanese unit. The pound and euro were also stronger. The more positive mood also supported high-yielding currencies, with the Australian dollar, South Korean won, Thai baht and Mexican peso all higher against the greenback. However, the South African rand was being sold on political uncertainty with local media reporting the ruling ANC had decided to remove scandal-tainted President Jacob Zuma as head of state. European shares faltered on Tuesday morning in contrast with Wall Street which bounced back for a second day overnight, and as a flurry of corporate results failed to lift indexes. The pan-European STOXX 600 index was just slightly negative, down 0.02 percent at 0920 GMT with bourses and sectors trading sideways in the absence of a clear upward or downward trend. "Wall Street is looking to build on a big two-day rally but there is as yet no real conviction behind this, as evidenced by the softer performance in European indices this morning," commented Neil Wilson, senior market analyst at ETX Capital. "We are yet to build consensus around this rally and it could run into trouble if conviction is lacking", he added. A flurry of corporate results yielded both positive and negative reactions on European trading floors. The telecoms sector suffered after Telenet reported 2017 results. The Belgian operator fell over 7 percent, the worst performer on the STOXX. Shares in Gucci owner Kering slid 2.6 percent despite the luxury group reporting stronger-than-expected Q4 sales growth. Rival LVMH lost 1.2 percent. Smelter Aurubis fell about 4 percent after its results fell short of the average forecast in a Reuters poll. On the other hand, shares in French video game producer Ubisoft rose 5.1 percent after a trading update which took it to the top of the STOXX 600. Randstad, the world's second-largest staffing company and a bellwether for the economy, saw fourth-quarter core profit rise 15 percent, buoyed by a strong recovery in the European job markets. Its shares gained 0.9 percent. European travel group TUI was the best performer of the FTSE and rose 4.6 percent after reporting that summer bookings for Turkey were recovering, echoing comments by rival Thomas Cook and adding to hopes that pressure on profit margins for tour operators may ease. The travel and leisure sector was among the few to trade firmly in positive territory, up 0.9 percent, with Lufthansa and Easyjet up 1.9 percent and 1.7 percent respectively.

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