Asia-Pacific markets are mixed as investors search for direction

SINGAPORE — Australian stocks rose more than 1% while Hong Kong and South Korean markets were lower on Monday ahead of Australia and Malaysia central bank decisions this week.

The S&P/ASX 200 advanced 1.26%, with banking and retail stocks in the green.

Japan and mainland China markets were also higher.

The Nikkei 225 in Japan pared earlier gains to trade 0.54% higher, while the Topix index climbed around 1%.

In China, the Shanghai Composite gained 0.14% and the Shenzhen Component rose 0.9%.

We probably will be bumping along the bottom, maybe a bit more downside from here.

Dan Fineman

Co-head of Asia-Pacific equity strategy, Credit Suisse

Hong Kong and South Korea stocks were down.

The Hang Seng index was closed on Friday and slipped as much as 1.8% in early trade on Monday. It was last down 0.59%.

Exchange-traded funds will be included in the stock connect scheme that links Hong Kong and mainland China from Monday.

South Korea’s Kospi initially struggled for direction and was last down 0.91%, while the Kosdaq shed 1.92%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.13% lower.

In Southeast Asia, Indonesia’s Jakarta Composite dropped 2.54%.

Dan Fineman, co-head of Asia-Pacific equity strategy at Credit Suisse, said markets appear to have adequately priced in the amount of Fed hikes that are to come, but that the “very high risk of recession” means markets are unlikely to rally .

“I think that the worst is behind us. We probably will be bumping along the bottom, maybe a bit more downside from here, but I think the difficulties of the first half will not be repeated on the same scale in the second half,” he told CNBC’s “Street Signs Asia” on Monday.

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Currencies and oil

The US dollar index, which tracks the greenback against a basket of its peers, was at 105,143.

“The possibility of 75bp hikes at its June and July meetings is keeping the USD strong in the near term, but we maintain our core view that dollar strength will wane later in the year,” Richard Yetsenga, chief economist at ANZ, wrote in a Monday note.

The Japanese yen traded at 135.14 per dollar, strengthening from levels as weak as 137 per dollar last week. The Australian dollar was at $0.6806 after recovering from below $0.679 recently.

Oil futures fell in Asia’s afternoon trade. US crude futures shed 0.22% to $18.19 per barrel, while Brent crude futures slipped 0.21% to $111.39.

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