Asian stocks: Grim response to oil rally ahead of key risk events

Asian stocks portray mixed trend while heading into the European open on Tuesday. The equity market initially cheered oil prices rallying to fresh five-month highs on geopolitical tensions emanating from Libya and Iran. However, investors turned cautious due to lack of data and geopolitical uncertainty ahead of the key risk events of the week.

MSCI’s index of Asia-Pacific shares ex-Japan is gaining nearly 0.30% whereas Japan’s Nikkei is +0.10%. China’s Hang Seng adds +0.20% to its yesterday’s closing whereas Australia’s ASX is -0.10%. Further, India’s BSE Sensex is almost flat while Malaysian markets were down -0.20%.

Global markets also remained sluggish with the Dow Jones Industrial Average on the loss of -0.3% but the S&P 500 and the Nasdaq Composite added 0.1% and 0.2% respectively.

The US Dollar remains under pressure as Monday’s sluggish factory orders and no fresh updates from the trade talks with China pushed traders to wait before going long on the greenback.

The 10-year treasury yields of the US government bonds were also flat near 2.52% showing lack of market sentiment.

The recent news report that the US is proposing tariff hikes on the EU products and announcing a ban on 16 Saudi Arabians to arrive in the country adds volume into the geopolitical risk.

Additionally, Wednesday’s ECB, FOMC minutes and the US inflation, followed by Thursday’s EU summit and China’s inflation numbers are some of the top-tier risk events to watch during the rest of the week.