Asian shares fall as geopolitical concerns dampen confidence By Reuters

By Ankur Banerjee

SINGAPORE (Reuters) – Asian shares fell on Tuesday as investors weighed U.S. interest rate cuts and awaited earnings from AI darling Nvidia (NASDAQ: ) while rising tensions in the Middle East and supply concerns took hold risk sentiment and increased the price of oil.

Gold prices were near a record high as the dollar strengthened and the yen neared its highest level in three weeks as investors sought safety amid geopolitical risks, Hezbollah in Israel and Lebanon on Sunday. (GOL/) (FRX/)

It also supported crude oil prices and the eastern Libyan government’s announcement to shut down all oil fields, halting production and exports. (OR)

Investors are ahead of Nvidia’s earnings report on Wednesday, where anything less than a stellar forecast from the AI ​​chipmaker could shake investor confidence in the AI-fueled rally.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.36 percent lower on Tuesday, pulling away from a one-month high it hit in the previous session.

fell 0.16%, while Chinese shares were also on the back foot.

China’s blue-chip CSI300 fell 0.28 percent, while Hong Kong’s was 1 percent lower in early trade, dragged down by weak earnings from PDD Holdings, fears on lower spending of consumers.

It also influenced Canada’s sentiment and move, following the United States and the European Union, to impose a 100 percent tariff on Chinese electric vehicle imports and a 25 percent tariff on steel and aluminum imported from China.

POWELL PIVOT

In a much-anticipated speech, Federal Reserve Chairman Jerome Powell on Friday hinted at an imminent start to interest rate cuts, focusing on the Fed’s September meeting.

“With the Fed now firmly in the driver’s seat, markets will be in for an intense data watch,” said Gary Dugan, CEO of the Global CIO Office.

Investors’ focus will be on the US personal consumption expenditure price index – the Fed’s preferred gauge of inflation – due out on Friday and then the August payrolls report next week.

Markets are fully pricing in a 25 basis point cut from the Fed next month, with 100 bps of easing anticipated over the next three meetings of the year.

Mansoor Mohi-Uddin, chief economist at Bank of Singapore, said Powell did not clarify the size of the Fed’s future rate cuts, noting that “it will depend on incoming data, the evolution of the outlook and the balance of risks.”

“We continue to see the Fed making two 25 bps rate cuts this year to benefit risk assets. We think a 50bps cut next month is only likely if the payrolls report shows another jump in unemployment.”

The yen was a shade lower at 144.67 per dollar, giving up some of the haven gains from the previous session, which saw it hit a three-week high of 143.45 per dollar.

which measures the US currency against six rivals, was last at 100.84, close to the 13-month low of 100.53 it hit in the previous session.

Oil prices took a break in early trade on Tuesday after rising 3 percent in the previous session on supply concerns amid rising tensions in the Middle East and output cuts in Libya.

Futures were 0.45 percent lower at $81.06 a barrel, but not far off the two-week high of $81.58 hit on Monday.

Futures fell 0.5 percent to $77.01 a barrel, but remained close to the one-week high of $77.60 they hit overnight.

Gold prices fell to $2,511 an ounce on Tuesday, just off the record high of $2,531.60 hit on August 20.