Asian shares rise, eye Ukraine, higher energy costs


Asian shares edged higher on Tuesday as investors eyed the war in Ukraine and inflation risks including rising energy costs.

Benchmarks rose in Japan, Korea, Australia and China.

Russia’s war on Ukraine and Western sanctions on Russia are adding to worries about energy supply disruptions to Europe and rising prices that could hamper recovery. post-pandemic economy.

“There is no progress on peace talks, reports are circulating that the EU is setting the table for a Russian oil embargo. Stephen Innes, managing partner at SPI Asset Management, said: “Higher energy prices would be hugely damaging to the EU economy.

The price of benchmark US crude rose $2.89 to $115.01 a barrel on Tuesday in electronic trading on the New York Mercantile Exchange. Brent, the international standard, rose $3.78 to $119.40.

Japan’s benchmark Nikkei 225 rose 1.4% to 27,202.05. Australia’s S&P/ASX 200 rose 0.9% to 7,341.10. South Korea’s Kospi rose 0.8 percent to 2,708.63. Hong Kong’s Hang Seng rose 1.8% to 21,606.53, while the Shanghai Composite offset previous losses rose 0.3% at 3,263.83.

E-commerce giant Alibaba’s Hong Kong-traded shares jumped 8% after the company boosted share buybacks to $25 billion from $15 billion on Tuesday to support a more-than-severed share price. half since the ruling Communist Party tightened its control over the tech industry by launching regulatory crackdowns.

Stocks ended Monday’s session lower on Wall Street after a multi-day rally and bond yields edged up after Federal Reserve Chairman Jerome Powell said the central bank was ready to act. stronger action if it is necessary to control inflation.

The yield on 10-year Treasuries rose to 2.30% from 2.14% late Friday.

The S&P 500 fell less than 0.1% to 4,461.18, ending a four-day streak for the benchmark index. The Dow fell 0.6% to 34,552.99 and the Nasdaq fell 0.4% to 13,838.46.

Shares of smaller companies underperform the broader market. The Russell 2000 index lost 1% to 2,065.94.

In a speech at the National Association of Business Economists, Powell said the Fed would raise its short-term benchmark interest rate by half a point at more Fed meetings, if needed, to slow inflation. The Fed hasn’t raised its benchmark interest rate by half a point since May 2000.

On Wednesday, the central bank announced a quarter-point rate hike, its first rate hike since 2018. Stocks recovered from the announcement and went on to have their best week in more than a year. The central bank is expected to raise interest rates several more times this year.

Before Russia’s invasion of Ukraine fueled a new wave of global economic uncertainty, some Fed officials had said the central bank would do better to start raising interest rates by half a point in March.

Given the rising risks of a recession, Clifford Bennett, chief economist at ACY Securities, said he believes the Fed should act cautiously.

“Europe is likely to enter a recession and with the world experiencing persistently high food and energy prices, the poor will be disproportionately impacted. And the rate hikes won’t have an impact on this wave of war-induced inflation,” he said.

This week, there is not much US economic data to give investors a better understanding of how companies and investors are dealing with rising inflation.

Fed rate hike has been expected for months due to supply chain

Russia’s invasion of Ukraine has added to fears that inflation could worsen by driving energy and commodity prices higher. Oil prices are up more than 45 percent this year, and wheat and corn prices have also surged.

Boeing fell 3.6% after a 737-800 plane operated by China Eastern Airlines crashed in China with 132 people on board. Reports on Tuesday said there were no survivors. Shares of China Eastern fell 7% on Tuesday.

In currency trading, the US dollar rose to a six-year high against the Japanese yen, touching 120 yen. It traded at 120.35 yen mid-afternoon, up from 119.47 yen. The euro is priced at $1.0991, down from $1.1016.

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