By Nichola Saminather | SINGAPORE
Asian stocks mostly rebounded on Tuesday despite a further slide in U.S. tech shares, while the Canadian dollar soared on the possibility interest rates might go up sooner than expected.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.4 percent, recouping about half of the previous session’s losses as regional tech shares regained their composure.
The MSCI Asia Pacific Information Technology index .MIAP0IT00PUS steadied, after sliding 1.4 percent on Monday.
Some analysts had predicted Asian tech shares would not see as intense a selloff as their U.S. peers as their valuations were less stretched.
Japan’s Nikkei .N225 slipped 0.1 percent.
“The view that some U.S. tech shares are going through inevitable adjustments while retaining a positive outlook is also lessening the impact on the domestic market,” said Hitoshi Ishiyama, chief strategist at Sumitomo Mitsui Asset Management in Japan.
South Korea’s KOSPI .KS11 gained 0.4 percent, with the biggest stock Samsung Electronics (005930.KS) up 0.5 percent after Monday’s 1.6 percent slump. Naver Corp. (035420.KS) and LG Innotek (011070.KS), which led Asian losses on Monday, were flat and 1.3 percent higher, respectively.
Major Apple supplier Hon Hai Precision Industry (2317.TW) slipped 0.5 percent, but that was a moderation from Monday’s 2.9 percent slump.
“I don’t sit in the camp that we will see a prolonged pullback in U.S. tech, but there is a good chance this hot sector now underperforms and I had been suggesting increasing exposure to U.S. financials as a trade,” Chris Weston, chief market strategist at IG in Melbourne, wrote in a note.
In currencies, the Canadian dollar CAD= extended Monday’s strong gains, after a Bank of Canada official said the central bank would assess if it needs to keep interest rates at near-record lows as the economy grows.
That was a change in tone for the central bank, which said earlier this year that rate cuts remain on the table.
The “loonie” strengthened about 0.4 percent to trade at C$1.328 to the dollar, a two-month high, after gaining 1.1 percent on Monday.
“It feels like a long time since markets have been treated to unscheduled hints of tightening, and this was quite apparent when you saw the positive reaction of CAD crosses overnight,” Matt Simpson, senior market analyst at ThinkMarkets in Melbourne, wrote in a note.
The dollar inched higher to 110 yen JPY=D4, after falling 0.3 percent on Monday, ahead of a widely expected interest rate increase by the U.S. Federal Reserve this week.
The Bank of Japan, which is also meeting this week, is expected to keep its monetary policy unchanged.
The dollar index .DXY, which tracks the greenback against a basket of trade-weighted peers, crept up slightly to 97.189.
Sterling GBP=D3 was fractionally lower at $1.265 ahead of a Bank of England meeting at which the benchmark rate is expected to remain at 0.25 percent.
The euro EUR=EBS slipped slightly to $1.1198.
In commodities, oil advanced on news that Saudi Arabia would make supply cuts to customers.
U.S. crude CLc1 rose 0.4 percent to $46.24 a barrel.
Global benchmark Brent LCOc1 also added 0.4 percent to $48.46.
(Reporting by Nichola Saminather; Editing by Jacqueline Wong)