Market update: Property fears weigh on Asian markets

Wall Street was closed on Monday for Presidents Day, but this lack of activity was countered by China’s return to the trading fold after the country’s Lunar New Year holiday, which saw some key markets closed last week. Hong Kong was weighed down by poor performance from the real estate and financial sectors, driven by investor fears that initiatives would be launched in Beijing and Hong Kong to soften rising property prices. The Hang Seng closed down 1.0%, while the Shanghai Composite index fell 1.6%. Japan’s Nikkei also lost ground on Tuesday (-0.3%) after Japan's finance minister Taro Aso told a news conference that Japan was not considering buying foreign bonds as part of a monetary stimulus. Separately, economy minister Akira Amari said the Bank of Japan's new governor and two deputies will be decided after Prime Minister Abe returns from his US trip.

European shares are edging higher this morning, with the FTSE Eurofirst 300 up 0.3%. This comes on the back of a three-day losing streak, and has been led by Danone, whose share price is currently up 5.2% after the company beat sales forecasts and announced cost-cutting plans. In London, the FTSE 100 is up 0.1% at the time of writing. British dairy foods company Dairy Crest is gaining ground after announcing reorganisation plans involving targeted cost savings and some changes to senior management. Despite this good start to Tuesday’s trading, market sentiment remains cautious in Europe ahead of the Italian elections this weekend. Today’s macro releases include the closely-watched reading of German economic sentiment, the ZEW index.