Asian stocks posted modest gains on Tuesday, led by shares in resource companies, as strong U.S. factory data and surging commodities prices offset fears that unrest in Egypt could spread elsewhere in the Middle East.
Brent crude oil futures steadied after topping $100 a barrel overnight for the first time since 2008, adding to concerns of a global fuel price spike even as policymakers in many emerging economies struggle to contain soaring food prices.
China's official purchasing managers' index fell in January to its lowest level in five months. Though activity continued to expand, input prices rose quickly, keeping pressure on Beijing to tighten policy to contain inflationary pressures. The data signaled that demand for oil may not rise as quickly in China, the world's second largest oil user.
Stock markets in Shanghai and Hong Kong were little changed with investors reluctant to stake out fresh positions ahead of long Lunar New Year holidays later this week. China’s Shanghai Composite gained 0.3% and Hang Seng gained 0.2%.
Figures from South Korea showed consumer inflation in January rose more than expected at the upper end of the central bank's target. The finance ministry said consumer inflation was expected to hover at the 4% range in the current quarter before softening to 3% in the second half. The index rose 4.1% in January, above a 3.9% forecast in a Reuters poll. Seoul Composite was up 0.1%.
Singapore’s Straits Times was up 0.2% and Taiwan Weighted was up 0.5%. Japan's Nikkei share index and the MSCI index of Asian shares outside of Japan rose 0.16% percent and 0.2% respectively, with shares of energy and resource companies outperforming.
Relief that turmoil in Egypt was not escalating helped provide a floor for the market. European markets opened higher, the FTSE 100 was up 0.4%, CAC 40 gained 0.5% and DAX surged 0.6%.
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