Asian shares, oil mostly up after Fed rate hike

Asian shares, oil mostly up after Fed rate hike

BANGKOK (AP) – Asian stocks mostly rose on Thursday after the Federal Reserve stepped up its response to rising inflation Raise its prime rate by three-quarters.

Hong Kong’s benchmark Hang Seng fell 0.6% to 20,554.09 after the region’s monetary authorities matched a 0.75 percentage point rate hike from the Federal Reserve. and your one. The HKMA aligned its policy with the US monetary policy to keep the Hong Kong dollar stable against the US dollar.

Elsewhere in the region, stocks on Wall Street rose, tracking gains after the Federal Reserve acted as expected and advised its Chairman Jerome Powell. The Fed’s rate hikes have already had some success in slowing the economy and possibly easing inflationary pressures.

Investors awaited updates on U.S. economic developments and a conference call between U.S. President Joe Biden and Chinese leader Xi Jinping.

“While the meeting is not expected to make a concrete decision on tariff relief, any sign of a willingness to work in this direction is an additional positive for the market,” IG’s Jun Rong Yep said in comments.

Tokyo’s Nikkei 225 gained 0.2 percent to 27,761.53, while the Shanghai Composite added 0.6 percent to 3,294.42. In Seoul, the KOSPI closed up 0.7 percent at 2,432.91.

Australia’s S&P/ASX 200 rose 0.9% to 6,881.80 in June after the government reported a sixth straight month of growth in retail sales. Thai markets are closed for a holiday.

Wall Street investors hailed a widely expected move by the Federal Reserve – which raised its key interest rate to the highest level since 2018 – with a broad rebound on Wednesday.

Powell’s comments were seen by some as a sign that the Fed may not have to raise rates so aggressively in the coming months, sparking a rally in the final hour of regular trading.

The S&P 500 rose 2.6 percent to 4,023.61, while the tech-heavy Nasdaq gained 4.1 percent, its biggest gain in two years, to 12,032.42. The Dow Jones Industrial Average rose 1.4% to 32,197.59. Shares of the smaller company also rose, with the Russell 2000 rising 2.4% to 1,848.34. The indices are now on a weekly pace of gains, extending Wall Street’s strong July rally. So far this month, the S&P 500 is up 6.3%.

Bond yields fell broadly after the Fed announcement. The two-year U.S. Treasury yield, in line with Fed expectations, fell to 2.98% from 3.06% late Tuesday. The 10-year yield, which affects mortgage rates, fell to 2.78% from 2.79%.

The rate hike through Wednesday was the fourth so far this year, making borrowing more expensive and the economy slowing. Hopefully, the Fed and other central banks will cleverly find a middle ground where the economy slows enough to contain inflation, but not enough to cause a recession.

Citi analysts said in a note on Wednesday that Powell noted that a slowdown in growth was appropriate at some point, and the exact timing may not be clear, adding that they “see this as a particularly stoic rhetoric.” will not see. “

“We expect core inflation to prompt the Fed to grow at a more aggressive pace than they or the market expects,” the analysts wrote, adding that they expect the Fed to raise rates by three-quarters at its September policy meeting. will be announced, and further rate hikes will continue. in early 2023.

At the same time, some areas of the economy have begun to slow, notably real estate. U.S. existing home sales slowed for a fifth straight month in June as mortgage rates rose sharply this year.

U.S. second-quarter GDP data on Thursday will provide an economic update.

Share on Microsoft and google native alphabet The latest quarterly reports that followed were up 6.7% and 7.7%, respectively.

Spotify Technology rose 12.2% after the music streaming service reported more monthly active users and premium users than Street expected.

In other trades, U.S. benchmark crude rose $1.04 to $98.30 a barrel in electronic trading on the New York Mercantile Exchange on Thursday. On Wednesday, it rose $2.28 to $97.26.

Brent crude, the international benchmark, rose 93 cents to $102.60 a barrel.

The dollar is now at 135.44 yen, down from 136.55 yen. The euro rose to $1.0208 from $1.0197.

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Associated Press business writer Alex Vega contributed.

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