By Xie Yu

HONG KONG (Reuters) – Asian shares were cautiously higher on Tuesday after a late revival on Wall street, though global growth fears stoked by China’s stringent COVID-19 curbs and an expected streak of aggressive Federal Reserve tightening sapped risk appetite.

MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up 0.8%, helped by China’s blue chip index adding 0.33%, after its worst day in two years on Monday. Hong Kong’s benchmark also bounced 0.6%.

However, sentiments remained fragile even after. Twitter Inc Shares rose in the NYSE after news that Elon Musk was the richest man on the planet, agreed to $44 billion for the social media platform used by many global leaders.

In early trade, the nervousness over China’s slowdown economic growth hit Australian shares, with the benchmark local to Australia falling 1.78%. This was mainly due to declines in miners.

Stock index rose by 0.57% Stock futures in the United States were not affected by Asia trade.

Manishi Raychaudhuri is an Asia-Pacific equity strategist for BNP Paribas.

“If the lockdown situation persists for longer,” it impact China’s economy significantly and “also have an impact on the supply chains across the world,” he said.

In addition to China’s concerns about lockdown, the markets are worried that Fed tightening too fast could lead to a crash in the global economy. The world has just begun recovering from the COVID-19 pandemic.

At each of its two next meetings, the Fed will likely raise rates by half a point. [FEDWATCH]

Lockdown in China’s financial hub Shanghai has dragged into a fourth week, as authorities stick to their “dynamic zero-Covid” policy to combat the latest outbreak of Omicron cases.

The dollar enjoyed a good run on currency markets due to safe-haven market demand. China’s currency was stable in early trading and at 6.5564 dollars per dollar, after the People’s Bank of China stated late Monday night that they would reduce the number of reserves foreign exchange banks can hold.

It was helped to recover from Monday’s year low of 6.699 per dollar. This resulted in a reversal caused by worries about China’s economic expansion.

It was also higher than most of its peer currencies, its index against a basket comparators being 101.58. This is less than its overnight two-year peak.

The benchmark US 10-year yields stood steady at 2.811% in the morning. The hawkish Fed-induced highs of Treasury yields on Monday were reversed by Treasury yields that fell as investors fled to U.S. bonds for safety.

These same fears jolted Monday’s oil market, cutting about 4% off its value and causing it to drop to its lowest point in over two weeks. Early trade in Asia was steady, with a slight increase of 0.05% to $98.59 per barrel. It reached $102.42, an increase of 0.1%.

Increased 0.3% to $1.902.91 per ounce