Reuters - Share indexes in Asia and U.S. stock futures measures regained some buying momentum early Tuesday following a small advance in Europe equities' prices as market participants considered the chances of shares of U.S. technology companies recovering from recent selling.
Japan's Nikkei advanced 0.4 percent as revised data confirmed the country had fallen into its worst postwar contraction with business spending taking a bigger hit from the coronavirus than initially estimated.
China's blue chip index added 0.2 percent while Hong Kong's Hang Seng gained 0.6 percent even as President Donald Trump on Monday stepped up his anti-Chinese rhetoric by again raising the idea of decoupling the U.S. and China economies.
Elsewhere, Australian share indexes rose for a second consecutive session - up 0.8 percent as optimism around the development of potential COVID-19 vaccines underpinned sentiment. Shares of mining and financial companies led the buying.
That left MSCI's broadest index of Asia-Pacific shares outside Japan up 0.37 percent.
U.S. financial markets were closed Monday for a public holiday while Europe's STOXX 600 index was 1.7 percent higher.
Internationally traded U.S. S&P 500 futures erased their Monday losses to trade 0.5 percent higher. Technology company shares remained more fragile, however, with Nasdaq futures dipping 0.1 percent after having lost more than 6 percent late last week.
While many market players were unable to pinpoint a single trigger for the Nasdaq's fall, valuations have been stretched given its sharp 75 percent gain from a bottom hit in March.
"Those tech shares were becoming expensive so I would see their latest fall as a healthy correction," Sumitomo Mitsui DS Asset Management senior strategist Masahiro Ichikawa said.
Risk assets face problems from creeping doubts that U.S. policymakers might be unwilling to compile stimulus as some traders had hoped.
"The headline figures from Friday's U.S. jobs data were pretty good - so that could lead to speculation policymakers may no longer be eager to dole out trillions of dollars to support the economy," AllianceBernstein portfolio manager Masahiko Loo said.
"Markets may have gone too far in expecting the Federal Reserve to announce more easing steps this month," he said. Receding expectations are one reason behind a rise in U.S. bond yields last week.
The 10-year U.S. Treasurys yield was 0.716 percent - off a five-month low of 0.504 percent touched in August.
In currencies, sterling dropped after the European Union told Britain on Monday there would be no trade deal if it tried to tinker with the Brexit divorce treaty.
The warning came after British Prime Minister Boris Johnson's government was reported to be planning new legislation to override parts of the Brexit Withdrawal Agreement it signed in January.
The pound last fetched $1.3147, having lost 0.80 percent Monday to $1.3167 - near its lowest in two weeks.
Other currencies barely moved with rises in U.S. yields helping to stem the dollar's recent weakness.
The euro eased slightly overnight to $1.1818 and was last trading at $1.1804 while the dollar was little moved at 106.31 yen.
Gold prices eased Tuesday although rising doubts over the economic recovery from the COVID-19 slump limited losses. Spot gold was down 0.1 percent at $1,925.96 per ounce.
Oil prices dropped to five-week lows after Saudi Arabia made its deepest monthly price cuts to supply for Asia in five months and as uncertainty over China demand clouds the market's recovery. U.S. WTI futures fell 1.6 percent to $39.13 per barrel.
