Asian shares shrug off losses, Nikkei slumps

FE Team | Published: April 09, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

TOKYO, Apr 8 (Reuters): Asian stocks shrugged off early losses and rose on Tuesday, helped by Chinese shares a rising sharply on stimulus hopes, though Japanese equities slumped as the yen clung to its gains after the Bank of Japan (BoJ) held policy steady.
MSCI's broadest index of Asia-Pacific shares outside Japan added about 0.4 per cent. The Shanghai Composite Index was up 1.8 per cent.
Financial spreadbetters expected Britain's FTSE 100 to open 16 to 19 points lower, or down 0.3 per cent; Germany's DAX to open 7 to 10 points lower, or down 0.1 per cent; and France's CAC 40 to open unchanged.
"European equities are set to start flat as traders tread cautiously," Jonathan Sudaria, a dealer at London Capital Group said in a note to clients.
"Whilst the mini tech-wreck in the US has weighed on global markets, European sensibilities hadn't allowed valuations to reach such unfathomable levels so it's fair to assume that traders don't see why there should be a wider sell off," he said.
Wall Street gloom initially cast a shadow over the Asian session. On Monday, the Nasdaq Composite suffered its worst three-session decline since November 2011 as Internet stocks tumbled, while the S&P 500's three-day fall was its steepest since late January.
Rising tensions in Ukraine also tempered investor appetite for risk. Pro-Moscow protesters in eastern Ukraine seized arms in one city and declared a separatist republic in another, moves Kiev described on Monday as part of a Russian-orchestrated plan to justify an invasion.
Japan's Nikkei stock average bucked the regional trend and slumped 1.4 per cent to its lowest close in two weeks.
The BoJ kept monetary policy steady on Tuesday and maintained its view the economy is likely to continue recovering moderately, signalling its confidence the country is making steady progress toward meeting the bank's price target. But some investors had hoped Japan's central bank would surprise with an announcement of more purchases of more risk assets such as exchange-traded funds (ETFs).
"I think the BoJ are hedging their view a little bit. There is an element of increased caution," said Hiroshi Shiraishi, senior economist at BNP Paribas Securities in Tokyo.
"We don't rule out the possibility of an increase in risk asset purchases like ETFs, but we are quite sceptical about a big increase in the monetary base target."