Asian shares track Wall Street higher, oil prices retreat
BANGKOK (AP) — Asian shares were mostly higher Thursday after an advance on Wall Street that ended a three-day losing streak.
Tokyo, Hong Kong and Shanghai advanced while Seoul edged lower. Oil prices fell back and U.S. futures climbed.
Investors appeared to brush aside fresh evidence that inflation remains widespread in the U.S. economy in a U.S. government report that rising energy costs pushed wholesale prices up a record 11.2% last month from a year earlier.
That report comes a day after the department reported that consumer prices remain at their highest levels in generations.
Rising prices are driving the Federal Reserve and many other central banks to tighten monetary policy by raising interest rates, among other measures, to help cool the surging demand that is contributing to the problem.
South Korea’s central bank raised its benchmark interest rate by 25 percentage points to 1.50%. That was its fourth increase since August 2021. The Kospi in Seoul edged 0.1% lower to 2,714.44.
Shares in Singapore were flat after the Singapore Monetary Authority tightened its policy by adjusting currency exchange rates in a more aggressive move than had been expected. It also raised its forecast for 2022 inflation to 2.5%-3.5% from 2.0%-3.0%.
New Zealand’s central bank raised its benchmark interest rate on Wednesday.
Tokyo’s Nikkei 225 index 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 advanced 0.7% to 3,207.85 on reports that China’s central bank may ease policy to counter the blow to its slowing economy from pandemic-related shutdowns in major cities like Shanghai and Guangzhou.
“Overall, there may be some relief with the positive moves in Wall Street, along with indications from the China authorities for further monetary easing. It was reported that China will cut banks’ reserve requirement ratio (RRR) or use other policy tools “at an appropriate time,” Jun Rong Yeap of IG said in a commentary.
U.S. stock and bond markets face a shortened week and will be closed on Friday for the Good Friday holiday.
On Wednesday, the S&P 500 index rose 1.1% to 4,446.59, breaking a 3-day losing streak brought on by persistent worries about inflation and the tough medicine the Federal Reserve is planning to use against it.
The Dow Jones Industrial Average rose 1% to 34,564.59 and the Nasdaq picked up 2% to 13,643.59.
Smaller company stocks outpaced the broader market in a sign that investors were confident about economic growth. The Russell 2000 index surged 1.9% to 2,025.10 and is on track for a weekly gain.
Travel-related companies were among the biggest gainers. Delta gained 6.2% after it reported strong revenue during its first quarter and solid bookings. American Airlines jumped 10.6% and rivals Southwest and United Airlines also gained ground. Cruise line operators Carnival and Royal Caribbean had solid gains, along with Expedia Group.
Technology stocks also gained, while banks slipped following a disappointing earnings report from JPMorgan. It fell 3.2% after revealing a sharp drop in profits after writing down nearly $1.5 billion in assets due to higher inflation and the Russian-Ukrainian War.
Bond yields fell. The yield on the 10-year Treasury fell to 2.68% early Thursday from 2.72% late Tuesday.
Inflation may be peaking but will likely stick around for awhile as cost pressures filter their way through the markets.
Russia’s invasion of Ukraine has raised volatility for energy prices since oil supplies already were tight as demand rises with the waning of the pandemic. U.S. crude oil prices are up roughly 40% for the year, driving up gasoline prices and giving inflation’s a bigger hit on people’s wallets.
Companies in various industries have been raising prices to offset rising costs and maintain or increase their margins.
Internet retail giant Amazon said it will add a 5% “fuel and inflation surcharge” to fees it charges third-party sellers who use the retailer’s fulfillment services as the company faces rising costs.
Investors will get more details on how companies and consumers are dealing with inflation as more companies report their latest financial results. Insurer UnitedHealth Group and banks Wells Fargo and Citigroup are due to report their earnings on Thursday.
On Thursday, the Commerce Department will release its retail sales report for March, which will show whether and where consumers are pulling back on spending.
In energy trading U.S. benchmark crude oil slipped 35 cents to $103.89 per barrel in electronic trading on the New York Mercantile Exchange. It jumped $3.65 to $104.25 per barrel on Wednesday. Brent crude, the standard for international pricing of oil, lost 28 cents to $108.50 per barrel.
The U.S. dollar slipped to 125.22 Japanese yen from 125.63 yen. The euro rose to $1.0906 from $1.0888.
AP Business Writer Damian J. Troise in New York contributed.
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