Asian stocks follow Wall Street higher, oil prices fall
Asian stocks were mostly higher on Thursday after a lead on Wall Street snapped a three-day losing streak.
Tokyo, Hong Kong and Shanghai rose while Seoul fell slightly. Oil prices fell and US futures rose.
Investors appeared to discount fresh evidence that inflation remains widespread in the US economy in a US government report that said rising energy costs pushed wholesale prices to a record 11.2% last month compared to the previous year.
The report comes a day after the ministry reported that consumer prices remain at their highest level in generations.
Rising prices are prompting the Federal Reserve and many other central banks to tighten monetary policy by raising interest rates, among other measures, to help calm the growing demand that is contributing to the problem.
South Korea’s central bank raised its benchmark interest rate by 25 percentage points to 1.50%. It was its fourth increase since August 2021. The Kospi in Seoul edged down 0.1% to 2,714.44.
Stocks in Singapore remained flat after the Monetary Authority of Singapore tightened policy by adjusting exchange rates more aggressively than expected. It also raised its inflation forecast for 2022 to 2.5%-3.5% from 2.0%-3.0%.
The New Zealand central bank raised its key rate on Wednesday.
Tokyo’s Nikkei 225 gained 1.3% to 27,182.50 and the S&P/ASX 200 in Sydney climbed 0.5% to 7,515.60.
Hong Kong’s Hang Seng rose 0.4% to 21,448.61 and the Shanghai Composite Index rose 0.7% to 3,207.85 following reports that China’s central bank may ease its policy to counter the blow to its economy from pandemic-related shutdowns in major cities like Shanghai and Guangzhou.
“Overall, there could be some relief with the positive movements on Wall Street, as well as indications from the Chinese authorities for further monetary easing. It has been reported that China will reduce the reserve requirement ratio (RRR) for banks or would use other policy tools “when the time is right,” IG’s Jun Rong Yeap said in a comment.
U.S. stock and bond markets face a shortened week and will be closed Friday for the Good Friday holiday.
The S&P 500 Index rose 1.1% to 4,446.59 on Wednesday, ending a three-day losing streak sparked by lingering concerns about inflation and the tough remedy the Federal Reserve plans to take. use against it.
The Dow Jones Industrial Average rose 1% to 34,564.59 and the Nasdaq rose 2% to 13,643.59.
Shares of small companies outperformed the broader market, a sign that investors were confident about economic growth. The Russell 2000 index jumped 1.9% to 2,025.10 and is on track for a weekly gain.
Travel-related businesses were among the biggest winners. Delta gained 6.2% after posting strong revenue in its first quarter and strong bookings. American Airlines jumped 10.6% and rivals Southwest and United Airlines also gained ground. Cruise operators Carnival and Royal Caribbean posted strong gains, as did Expedia Group.
Tech stocks also rose, while banks fell following a disappointing earnings report from JPMorgan. It fell 3.2% after revealing a sharp fall in profits after writing down nearly $1.5 billion in assets due to rising inflation and the Russian-Ukrainian war.
Bond yields fell. The 10-year Treasury yield fell to 2.68% early Thursday from 2.72% late Tuesday.
Inflation may be at its peak, but it will likely persist for some time as cost pressures work their way through the markets.
Russia’s invasion of Ukraine increased volatility in energy prices, as oil supplies were already tight as demand increased with the decline of the pandemic. Crude oil prices in the United States are up about 40% for the year, pushing up gasoline prices and giving inflation a bigger impact on people’s wallets.
Companies in various sectors have increased their prices to offset rising costs and maintain or increase their margins.
Internet retail giant Amazon said it would add a ‘fuel and inflation surcharge’ of 5% to the fees it charges third-party sellers who use the retailer’s fulfillment services. as the business faces rising costs.
Investors will get more details on how businesses and consumers are handling inflation as more companies release their latest financial results. The insurer UnitedHealth Group and the banks Wells Fargo and Citigroup are due to publish their results on Thursday.
On Thursday, the Commerce Department will release its retail sales report for March, which will show if and where consumers are cutting back on spending.
In energy trading, the benchmark U.S. crude oil slipped 35 cents to $103.89 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $3.65 to $104.25 a barrel on Wednesday. Brent crude, the standard for international oil prices, fell 28 cents to $108.50 a barrel.
The US dollar slipped to 125.22 Japanese yen from 125.63 yen. The euro fell from $1.0888 to $1.0906.
AP Business Writer Damian J. Troise in New York contributed.