Asian stocks rise after Fed says rate hikes may be needed

TOKYO – Asian stock markets rose on Thursday after the US Federal Reserve said higher US interest rates may be needed to cool inflation.

Shanghai, Tokyo and Sydney have made progress. Hong Kong refused. Oil prices edged up after falling below $100 a barrel this week.

Wall Street’s benchmark index, the S&P 500, was up 0.4% on Wednesday Notes from the last Fed meeting said “an even tighter stance may be appropriate” to bring inflation back to its 2% target. Fed officials acknowledged that this could weaken the economy.

Investors fear aggressive rate hikes in the US and Europe Curbing price increases that have hit four-decade highs could dampen global economic activity.

“Equities have risen because commodity and oil prices have fallen sharply,” said Stephen Innes of SPI Asset Management. “Both are the critical targets that Fed policy is designed to curb; hence inflation expectations are coming under control.”

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The Shanghai Composite Index rose 0.5% to 3,372.42 and Tokyo’s Nikkei 225 rose 1.1% to 26,399.23. Hong Kong’s Hang Seng lost 0.4% to 21,498.91.

Seoul’s Kospi rose 2.1% to 2,340.03 and Sydney’s S&P ASX 200 rose 0.4% to 6,618.90.

India’s Sensex opened up 0.6% to 54,089.79. New Zealand declined while Southeast Asian markets rose.

On Wall Street, the S&P 500 rose to 3,845.08. The Dow Jones Industrial Average gained 0.2% to 31,037.68. The Nasdaq Composite was up 0.3% to 11,361.85.

That The Fed has increased its main interest over the past month Rate up three quarters of a point to a range of 1.5% to 1.75%, the largest single rise in nearly three decades. Chairman Jerome Powell suggested at the time that a rate hike of half a point or three-quarters a point, three times the Fed’s usual range, was likely when policymakers met later this month.

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Notes released Wednesday from the Fed’s June 14-15 meeting confirmed that other officials agreed such an increase would be “probably appropriate.”

Inflation was fueled by Russia’s attack on Ukraine, which drove up prices for oil and other commodities, and Chinese anti-virus controls that crippled Shanghai and other industrial hubs disrupted supply chains.

Oil prices closed below $100 a barrel on Tuesday for the first time since early May, but US crude is still up more than 30% for the year.

Benchmark US crude is up 46 cents in electronic trading on the New York Mercantile Exchange to $98.99 a barrel. The contract was down 97 cents on Wednesday to $98.53 a barrel. Brent crude, the price basis for international trade, rose 45 cents to $101.16 a barrel in London. In the previous session, it fell $2.08 to $100.69.

The dollar fell to 135.69 yen from 135.98 yen on Wednesday. The euro rose to $1.0201 from $1.0182.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, transcribed or redistributed without permission.

https://www.local10.com/business/2022/07/06/global-benchmarks-mixed-as-euro-hovers-at-20-year-low-to-usd/ Asian stocks rise after Fed says rate hikes may be needed

Sarah Y. Kim

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