Asian markets dipped Tuesday after holiday closures saw muted activity in Europe, with investors in both continents searching for fresh leads.

Tokyo fell just over one percent, snapping a three-day winning streak as investors locked in profits after the recent gains.

Hong Kong dipped 0.8 percent as traders returned to work after the Lunar New Year holiday marking the start of the Year of the Dog.

Monday’s closures in the US and Canadian markets “crimped activity”, said Stephen Innes, an analyst at OANDA.

“And adding to the void, there was scant data during European hours, which severely nipped action as traders had few if any fundamental guideposts,” Innes added.

In currency markets, the euro-dollar was trading in a narrow range while the yen slipped against the greenback and the euro in Asian trade, but still remained at a high level.

“The positive move seen in the domestic equity market appears to have been the driver for the softer yen,” Rodrigo Catril, senior strategist at National Australia Bank, said in a note to clients.

“That said, given the sharp decline in USD/JPY over the past week, (it) is not that surprising to see the currency stage a small rebound,” he said.

A stronger yen is negative for Japanese exporters as it erodes their profits when repatriated.

Automakers dropped, with Toyota down 1.19 percent at 7,291 yen and Honda off 1.71 percent at 3,785 yen.

In Hong Kong, banking giant HSBC announced it more than doubled pre-tax profit to $17.2 billion in 2017 after a drive to slash costs.

But analysts said that although the bank had bounced back after restructuring and a string of financial scandals, it missed some profit forecasts. Shares in HSBC closed down 3.11 percent at HK$80.95.

Elsewhere in Asia, Seoul shed 1.13 percent, while Jakarta lost 0.81 percent and Singapore 0.40 percent. Markets in mainland China remained shut for the holiday.

Europe subdued
Europe’s main stock markets steadied at the start of trading on Tuesday, with London’s benchmark FTSE 100 index down fractionally at 7,247.38 points.

Frankfurt climbed 0.1 percent to 12,403.63 points and the Paris CAC 40 was virtually flat at 5,257.43.

The subdued return to trading came after world markets were roiled in recent weeks by a degree of volatility not seen in years, fraying investor nerves.

In commodity trading, oil markets were mixed after starting the week on a positive note.

“Convincing signals from OPEC and their partners to extend production cuts continue to resonate with investors,” analyst Innes said.

“Also, an escalation of Middle East tensions, on the back of Israeli Prime Minister Benjamin Netanyahu beating the war drums by suggesting that Israel could act against Iran alone, has nudged prices higher.”

In a speech in Munich on Sunday, Netanyahu warned Tehran over aggression by Iran and its “proxies” in Syria, saying: “Do not test Israel’s resolve.”

Tensions between the arch enemies have mounted after clashes involving Syrian forces this month, sparked by Israel’s downing of what it called an Iranian drone sent from Syria.

“Predictably this warmongering has put the region on a state of readiness fearing a head-to-head incident and boosted oil prices due to the fear of sizable supply disruptions,” Innes said.

But record high US production brought oversupply concerns back to the fore, sparking fears it could negate the impact of the OPEC-led output cuts.

US production has soared past 10 million barrels per day and an increase in the number of active oil drilling rigs could push output higher.

– Key figures around 0830 GMT –
Tokyo – Nikkei 225: DOWN 1.0 percent at 21,925.10 (close)

Hong Kong – Hang Seng: DOWN 0.8 percent at 30,873.63

Shanghai – Composite: Closed for public holiday

London – FTSE 100: FLAT at 7,247,66 points (open)

Euro/dollar: DOWN at $1.2358 from $1.2395 at 1640 GMT

Pound/dollar: DOWN at $1.3949 from $1.3991

Dollar/yen: UP at 107.09 yen from 106.57 yen

Oil – Brent North Sea: DOWN 30 cents at $65.37 per barrel

Oil – West Texas Intermediate: UP 51 cents at $62.19

New York – Closed for public holiday