Asian shares mostly rise as markets eye US interest rates
TOKYO — Asian shares mostly rose Monday, as investors eyed surging energy costs and prospects for interest rate hikes in the U.S.
Benchmarks edged up in Japan, Australia and South Korea. Shanghai saw shares rise in Hong Kong, but they fell in Shanghai.
Some analysts are concerned that the U.S. Federal Reserve could raise interest rates too fast or too often, causing a recession. The Asian region, which imports and manufactures goods for America, would be most affected by a slowdown in the U.S. economy.
The Fed has stated that it will continue to increase interest rates to curb rising inflation. During the coronavirus pandemic, the benchmark short-term rate was at an all-time low of almost zero.
“Many others had spotted recession risk out in 2024, but we have been aggressive from the outset in our forecast for a potential U.S. recession this year,” said Clifford Bennett, chief economist at ACY Securities.
Japan’s benchmark Nikkei 225 gained 0.5% in afternoon trading to 26,552.63. SoftBank Group stock rose despite reporting large losses on its investments last weekend. After falling in previous weeks, Uniqlo retail chain also rose due to concerns about virus lockdowns occurring in China.
In other regional trading, Australia’s S&P/ASX 200 edged up 0.3% to 7,093.00. South Korea’s Kospi was little changed inching up less than 0.1% to 2,605.48. Hong Kong’s Hang Seng recouped morning losses to rise nearly 0.1% to 19,915. 74, while the Shanghai Composite shed 0.6% to 3,066.48. Despite some relief from concern about interest rate increases, investors are still closely watching for what Fed Chairman Jerome Powell might do next, according to Stephen Innes, managing partner of SPI Asset Management.
” This does not mean that the bear market has ended, especially with the recession still fresh in everyone’s minds,” Innes stated.
Wall Street ended last week with a broad rally, but the market still recorded its sixth straight weekly drop, the longest such streak since 2011.
The S&P 500 rose 2.4% to 4,023.89. The index is now down 15.6% for the year. The Dow gained 1.5% to 32,196. 66, while the Nasdaq rose 3.8% to 11,805. Stocks of smaller companies also saw solid gains. The Russell 2000 gained 3.1% to 1,792.67.
Although some technology shares rose, Twitter fell 9.7% Friday, after Tesla CEO Elon Musk said he was putting his deal to acquire the social media company on hold. Tesla rose 5.7%.
The upcoming round in corporate earnings could provide insight into how inflation affects businesses and consumers. A number of major U.S. retailers will report their results this week, including Target, Walmart, and Home Depot.
Markets are down since March, as traders fear that the Fed will not be able to slow down the economy in order to contain the highest inflation rate in 40 years without causing a recession.
In energy trading, benchmark U.S. crude lost $1. 41 to $109. 08 a barrel in electronic trading on the New York Mercantile Exchange. It rose $4. 36 to $110. 49 on Friday. Brent crude oil, the international standard, fell $1. 79 to $109. 76 a barrel.
In currency trading, the U.S. dollar edged down to 128. 97 Japanese yen from 129. 28 yen. The euro cost $1. 0401, inching down from $1.0402.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
I have been writing professionally for over 20 years and have a deep understanding of the psychological and emotional elements that affect people. I’m an experienced ghostwriter and editor, as well as an award-winning author of five novels.