Thursday, December 2, 2021

Asian Stock Markets Fall Amid Inflation And Fears Over Oil Prices

TOKYO (AP) – Asian stocks fell mostly on Wednesday as inflation concerns fueled expectations that the US Federal Reserve may move faster than expected to raise interest rates.

Japan’s Nikkei 225 fell 1.6% to 29,302.66 after Tuesday’s national holiday as tech stocks were hit hard by speculation about the Fed’s actions. South Korea’s Kospi fell 0.1% to hit 2,993.80. The Australian S & P / ASX 200 Index was down 0.2% to 7,399.40. The Hong Kong Hang Seng rose 0.6% to 24,788.50 and the Shanghai Composite rose 0.2% to 3,594.45.

“Markets continue to shift their expectations towards tighter Fed monetary policy,” said Yeap Jun Rong, IG’s market strategist, adding that investors will be watching the US data to be released later in the day.

Some Asian central banks have already started raising interest rates to keep inflation down. New Zealand raised its benchmark interest rate by 0.25% on Wednesday to 0.75%.

In October, the Reserve Bank raised it from a record low of 0.25% to 0.5%, the first such increase in more than seven years, stripping some of the support it provided when the coronavirus pandemic began.

The Fed was to publish minutes later that day after its October policy meeting, potentially giving investors more details on the central bank’s plan to cut bond purchases that helped keep interest rates low.

Investors watched to see if rising inflation pressures would push the Fed to accelerate its plans to cut bond purchases and raise its base interest rate.

Wall Street ended an unstable trading day as profits from banks and energy companies offset losses from other market participants. The S&P 500 was able to climb 0.2% to 4,690.70 after swinging between small gains and losses for most of the day.

The Dow Jones Industrial Average rose 0.5% to hit 35,813.80, while the Nasdaq composite index closed 0.5% lower at 15,775.14. Small companies also lost ground. The Russell 2000 Index fell 0.1% to 2,327.86.

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The yield on 10-year US Treasuries rose to 1.68% from 1.63% on Monday evening, but fell to 1.65% by Wednesday afternoon in Asia.

The price of crude oil in the United States rose 2.3% and wholesale gasoline sales rose 3.4% on Tuesday after President Joe Biden ordered the release of 50 million barrels of oil from the country’s strategic reserves to help lower energy costs. This step was taken together with other major oil-consuming countries, including Japan.

While the general data for Japan did not reveal inflation concerns elsewhere, critics say it is less pronounced, but is clearly present in sectors prone to skyrocketing energy prices, from businesses that rely on fuel to plastic bags that are oil. product.

A release of oil reserves may not necessarily lead to lower oil prices, but analysts say it could serve as a signal to OPEC.

In energy trading, the US benchmark oil rose 41 cents to $ 78.91 a barrel. Brent crude, the international standard, added 33 cents to $ 82.64 a barrel.

There is likely to be more mixed trading in equities this week, with US markets closing on Thanksgiving Thursday and then early Friday morning.

Wall Street will receive some economic data on Wednesday that could give investors a better idea of ​​the pace and scale of the economic recovery. The Labor Department is to publish a weekly report on unemployment benefits. The Commerce Department releases third-quarter gross domestic product data and October new home sales.

In foreign exchange trading, the US dollar fell to 114.99 Japanese yen from 115.10 yen. The euro was worth $ 1.1241, up from $ 1.1254.

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Associated Press author Nick Perry contributed from Wellington, New Zealand.

Yuri Kageyama on Twitter https://twitter.com/yurikageyama

Nation World News Deskhttps://nationworldnews.com
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