Asian markets rise ahead of US inflation data | News agency

BEIJING (AFP) – Asian stock markets rose on Wednesday as investors awaited US inflation data, and some concern could lead to further interest rate hikes.

Shanghai, Tokyo, Hong Kong and Seoul prices rose. Sydney refused. Oil prices rebounded from Tuesday’s low but remained below $100 a barrel.

The benchmark S&P 500 index fell on Wall Street on Tuesday before the government released data on consumer prices in June and company results.

Investors are concerned that US and European central bank action to cool four-decade high inflation could derail global economic growth. The Federal Reserve raised its key rate by 0.75 percentage points last month, three times its usual margin, and two members of the rate-setting committee say they support a similar hike this month.

IG’s Yeap Jun Rong said in a report that strong inflation in the US “might strengthen the case” for Fed policy tightening, but that traders may choose to “buy in a peak-inflation situation” with lower oil prices.

The Shanghai Composite rose 0.1% to 3,285.84 and Tokyo’s Nikkei 225 rose 0.3% to 2,6423.11. Hong Kong’s Hang Seng rose 0.7% to 20996.93.

The Kospi index in Seoul was up 0.7% at 2334.04 while the S&P-ASX 200 in Sydney was down 0.9% at 53886.61. New Zealand advanced while Southeast Asian markets fell.

New Zealand’s central bank on Wednesday raised its benchmark interest rate by half a percentage point to 2.5% as it tries to curb inflation. It was the third time this year that the New Zealand central bank raised its interest rate by 50 basis points, following increases in April and May. There was also a quarter percentage point rise in February.

The S&P 500 lost 0.9% to 3818.80, down for a third day. Technology, healthcare and energy stocks accounted for a large share of the losses.

The Dow Jones Industrial Average fell 0.6% to 30981.33 and the Nasdaq Composite fell 0.9% to 11264.73.

Major companies are scheduled to announce second-quarter results in the next few weeks.

Expectations seem dim. Analysts expect 5.1% growth for companies across the S&P 500, which will be the weakest since the end of 2020, according to FactSet.

Inflation in the United States has jumped as the economy recovers from the coronavirus pandemic.

The Russian invasion of Ukraine drove up the prices of oil and other commodities. Global manufacturing supply chains have been disrupted by Chinese efforts to contain virus outbreaks that have temporarily closed Shanghai and other industrial centers.

The US bond market is flashing warning signs of a possible recession.

The yield on the 10-year Treasury, or the difference between the market price and payment at maturity, fell to 2.96% from 2.98% late Monday. It’s lower than the two-year Treasury yield, which indicates that some investors expect a recession in the next year or two.

In energy markets, US crude rose 21 cents to $96.05 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $8.25 on Tuesday to $95.84. Brent crude, the price basis for international trading, rose 27 cents to $99.76 a barrel in London. It fell $7.61 in the previous session to $99.49.

The dollar fell to 137.07 yen from 136.77 yen on Tuesday. The euro fell to $1.0037 from $1.0045.

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