Berliner Tageblatt - Asian markets fluctuate with eyes on megatech results

Oil prices steadied following sharp falls Monday on relief that Israel's strikes on Iran spared the country's energy infrastructure and that the risk of escalation in the Middle East had eased.

Concerns in the oil market have now shifted back to focus on potential oversupply in 2025 and a slowdown in demand from China, the world's largest oil importer, according to analysts.

US stocks closed higher Monday, boosted by the cheaper oil, and as investors look ahead to a busy week of economic indicators with the market already hovering near record highs.

The US government will release its third quarter GDP growth estimate this week, as well as its closely watched monthly labour market report, ahead of the Federal Reserve's next rate decision just after the US presidential election.

Futures traders currently overwhelmingly expect a 25 basis points cut, according to CME FedWatch.

Investors are also eyeing the earnings reports of five of the "Magificent Seven" tech giants due this week, including Google parent Alphabet, Amazon, Apple, Facebook-parent Meta, and Microsoft.

Asian markets fluctuated with Tokyo, Hong Kong, Sydney, Seoul and Kuala Lumpur in the green, while Shanghai, Singapore, Taipei, Bangkok and Manila retreated.

London, Frankfurt and Paris all rose in early European trade.

Japanese shares built on the previous day's strong gains as cheaper oil and the weaker yen boosted the market despite the political uncertainty following Sunday's general election which left the ruling coalition short of a majority.

Investors are also awaiting the Bank of Japan's rate decision later this week, with the central bank expected to stand pat following two hikes earlier this year.

"Although BoJ monetary policy will not be directly affected by the political machinations underway to find a governing coalition in Tokyo, it is likely that the next government will need to scale up fiscal spending," said Alvin Tan of RBC Capital Markets.

"In this vein, there could be increased pressure on the BoJ to go slow on policy tightening."

Focus is also on a key political meeting in Beijing next week, with investors hoping for details of an expected major stimulus plan to support the Chinese economy, which has struggled to recover from the pandemic with growth dragged down a debt crisis in the property sector.

The People's Bank of China on Monday rolled out a new lending tool to inject liquidity into the market, with about 2.9 trillion yuan ($407 billion) in loans set to expire in November-December.

"With the clock ticking, Beijing hopes this tool will prop up market sentiment and counter any looming liquidity crunch," said Stephen Innes, analyst at SPI Asset Management.

"The timing here isn't just tactical; it's essential. China's economic engine has been sputtering with soft demand and lacklustre growth data, and with the potential shake-up of the US election looming enormous, stability in the financial markets is critical for Beijing," Innes said.

Key figures around 0815 GMT -

Tokyo - Nikkei 225: UP 0.8 percent at 38,903.68 (close)

Hong Kong - Hang Seng Index: UP 0.5 percent at 20,701.14 (close)

Shanghai - Composite: DOWN 1.1 percent at 3,286.41 (close)

London - FTSE 100: UP 0.2 percent at 8,305.83

Euro/dollar: DOWN at $1.0812 from $1.0815 at 2040 GMT Monday

Pound/dollar: UP at $1.2973 from $1.2972

Dollar/yen: UP at 153.25 yen from 153.24 yen

Euro/pound: DOWN at 83.34 pence from 83.37 pence

Brent North Sea Crude: UP 0.3 percent at $71.63 per barrel

West Texas Intermediate: UP 0.2 percent at $67.57 per barrel

New York - Dow: UP 0.7 percent at 42,387.57 (close)

N.Fournier--BTB