Asian stocks traded within a narrow range on Tuesday, as investors considered new political uncertainties in European markets following right-wing gains in elections and a snap poll in France. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.4% in light trading, with Chinese blue chips down 0.7%. In contrast, Japan's Nikkei edged up 0.3%, and South Korean stocks rose 0.5%.
EUROSTOXX 50 futures increased by 0.2%, stabilizing after a retreat on Monday, while FTSE futures rose 0.1%.
Concerns over the political landscape in Europe weighed on the euro, French stocks, and government bonds, particularly as investors assessed the potential impact of right-wing successes on EU cohesion. Bond yields across Europe rose, with the spread between French and German debt widening significantly amid indications that the far-right National Rally could win the snap election without a clear majority.
Elsewhere, markets had a muted response to Apple's (NASDAQ) new AI strategy, impacting the company's shares slightly. S&P 500 futures and Nasdaq futures both eased 0.1% in Asian trading after minor gains on Monday.
Despite higher U.S. yields following Friday's jobs report and reduced expectations for Federal Reserve rate cuts, global equities have shown resilience. Analysts from JPMorgan revised their expectations, now predicting the first Fed rate cut in November, citing ongoing market risks such as political tensions, geopolitical issues, and market concentration.
In currency markets, the euro stabilized around $1.0766 after touching a one-month low, while the dollar remained strong at 157.17 yen, close to its recent peak. Gold prices held just above one-month lows at $2,306 per ounce, influenced by shifts in U.S. rate cut expectations.
Oil prices consolidated following a 3% rally on Monday, supported by forecasts of robust summer demand and potential U.S. crude purchases for its strategic reserves. Brent crude hovered at $81.59 per barrel, while U.S. crude remained unchanged at $77.74 per barrel. Market participants awaited key oil supply and demand data from the U.S. Energy Information Administration, OPEC, and the International Energy Agency later in the week.
Paraphrasing text from "Reuters" all rights reserved by the original author.
