Investors were also assessing Monday's economic data, which showed U.S. manufacturing activity in March slumped to its lowest level in nearly three years as new orders plunged, and analysts said activity could decline further due to tighter credit conditions. "A weakening trend has been in place since May last year, but recent banking turmoil may have dented confidence further," ANZ analysts said in a note.
"Manufacturing is one of the most rate-sensitive sectors of
the economy as goods like autos are primarily bought on credit.
There continues to be encouraging news on goods inflation."
Early in the Asian day, MSCI's broadest index of
Asia-Pacific shares outside Japan was trading
steady.
Japan's Nikkei stock index rose 0.24% while
Australian shares were up 0.1%.
China's blue-chip CSI300 index edged down 0.16% in
early trade, while Hong Kong's Hang Seng index opened
0.64% lower.
On Monday, gains in energy shares helped lift world stock
indexes following the surprise OPEC+ group's new production cuts
that could push oil prices toward $100 a barrel.
The S&P 500 energy sector index surged 4.9% with
Chevron Corp , Exxon Mobil Corp and Occidental
Petroleum Corp all rallying more than 4%.
However, the prospect of higher oil costs added to inflation
worries on Wall Street just days after evidence of cooling
prices raised expectations that the U.S. Federal Reserve might
soon end its aggressive monetary tightening campaign.
The Dow Jones Industrial Average rose 0.98%, the S&P
500 gained 0.37% and the Nasdaq Composite dropped
0.27%.
Shares of Tesla Inc dropped 6.1% after disclosing
March-quarter deliveries rose just 4% from the previous quarter,
even after CEO Elon Musk slashed car prices in January to boost
demand.
Market watchers have been trying to gauge how much longer
the Fed may need to keep raising interest rates to cool
inflation and whether the U.S. economy may be headed for
recession.
Treasury yields retreated after the U.S. manufacturing
data, which increased expectations for some investors the Fed
will cut rates later this year as the economy slows. Separate
data also showed U.S. construction spending weakened in
February.
The yield on benchmark 10-year Treasury notes was last at 3.4263% compared with its U.S. close of 3.432% on Monday.
The two-year yield , which rises with traders' expectations of higher Fed fund rates, touched 3.9841% compared with a U.S. close of 3.98%.
The dollar reversed some losses but remained on the defensive after losing ground on Monday in the wake of the weak U.S. economic data. The U.S. dollar index which tracks the greenback against a basket of currencies of other major trading partners, was last up at 102.11. The euro was a touch higher at $1.0904, while against the Japanese yen , the dollar was off 0.09% at 132.35.
Gold was slightly lower. Spot gold was traded at $1982.19 per ounce. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates YTD Global asset performance Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Shri Navaratnam)
julie.zhu1.thomsonreuters.com@reuters.net))