Asian stocks rebound with US interest rate hike as oil rises and dollar falls

Asian stocks rose on Tuesday as interest rates rose in the United States,
with rising oil prices and rising inflation in the United States,
as well as the US dollar declining against the Japanese yen and the euro.

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Asian stocks rise ahead of US rate hike

US inflation accelerated to 9.1%

Oil rises for the second day with concern over a supply shortage

Asian stocks rise ahead of US rate hike

Asian stock markets rose on Tuesday as investors braced for
the Federal Reserve to raise interest rates sharply again to calm inflation.

Shanghai, Hong Kong and Seoul rose, while Tokyo declined,
and oil rose by more than $1 a barrel.

Wall Street closed 0.1 percent higher on Monday ahead of this week’s Fed meeting,
at which officials are expected to announce a rate hike of up to
three-quarters of a percentage point, triple the usual margin.

That puts the Fed’s benchmark interest rate in the range of 2.25 percent to 2.5 percent,
the highest level since 2018 before the coronavirus pandemic.

The Shanghai Composite Index rose by 0.6 percent to 3270.31,
fell less than 0.1 percent to 27581.73,
and Hong Kong’s Hang Singh rose by 1.4 percent to 20808.56.

On Tuesday, Alibaba, China’s largest e-commerce company,
said it plans to apply for an initial listing in Hong Kong.

The move will make Alibaba a dual-listed company on the New York Stock Exchange
and the Hong Kong Stock Exchange.

Alibaba went public in New York in September 2014
and completed a secondary listing in Hong Kong in November 2019.

Seoul’s Kospi rose by 0.3 percent to 2408.85,
and Sydney’s S & P-ASX 200 also rose by 0.1 percent to 6798.00.

Investors are worried about the Federal Reserve raising interest rates significantly to contain inflation,
which has reached four-decade highs,
and similar actions by central banks in Europe and Asia could derail global economic growth.

artical name Asian stocks rebound with US interest rate hike

US inflation accelerated to 9.1%

The Treasury Secretary said on Sunday that the U.S. economy was slowing,
but health employment appeared not to be in recession.

Fed officials who publicly supported the rate hike also pointed to a relatively strong labor market
as evidence that the economy could bear higher borrowing costs.

On Wall Street, the S&P 500 Index rose to 3966.84 on Monday,
the Dow Jones Industrial Index rose by 0.3 percent to 31990.04,
and the Nasdaq Composite Index fell by 0.4 percent to 11782.67.

Major indices made strong gains last week after a combination of better-than-expected reports on corporate profits.

Walmart stocks fell by about 10 percent on Monday in after-hours trading,
after the retail giant cut its earnings forecast for the second quarter and the full year.

On Thursday, the Commerce Department is set to release its first estimate of US economic
growth in the prior months ending in June,
while some forecasters predict a contraction in the second quarter
after production contracted by 1.6 percent in the three months ending in March.

This week, heavy tech companies such as Apple, Meta, Microsoft and Amazon,
as well as Coca-Cola and McDonald’s, are also scheduled to report results.

The US dollar declined against the Japanese yen to 136.49 yen from 136.72 on Monday,
and the euro also rose to $1.0237 from $1.0221.

artical name Asian stocks rebound with US interest rate hike

Oil rises for the second day with concern over a supply shortage

On Tuesday, oil prices rose for a second consecutive day
with growing concern over scarce European supplies after Russia,
a major oil and natural gas supplier in the region, cut off gas supplies via a major pipeline.

Brent crude futures for September settlement by rose by $1.51, or 1.4 percent,
to $106.66 per barrel by 0339 GMT, extending yesterday’s gain by 1.9 percent.

US West Texas Intermediate crude futures rose by $1.36, or 1.4 percent,
to $98.04 per barrel after rising by 2.1 percent on Monday.

Russia tightened its pressure on gas in Europe on Monday,
with Gazprom saying supply via the Nord Stream 1 pipeline
to Germany would decline to just 20 percent of its capacity.

Russia’s cut-off of supplies will leave countries unable
to meet their targets to refill natural gas inventories before the winter demand period.

This may lead end users to exchange their gas for petroleum products,
especially diesel. But this also carries risks because Russia provides the region
with the most diesel fuel and prices are expected to rise for drivers who rely on fuel.

The supply of crude oil, oil and gas in Europe has been disrupted by a range of Western sanctions
and payment differences with Russia since its invasion of Ukraine on 24 February,
which Moscow describes as a “special military operation.”

However, lower demand due to the recent rise in crude oil and fuel prices
and the expectation of higher interest rates in the United States has put pressure on prices.

The US central bank

is widely expected to raise interest rates
by 75 basis points at the end of its policy meeting on Wednesday,
which could reduce economic activity and thus affect fuel demand growth.

Experts say that market sentiment fluctuates between concern about supply-side instability
and expectations of weak fuel demand under the downward pressure of the global economy.

The gap between European and global benchmark Brent crude
and WTI has widened to levels not seen since June 2019,
with the easing of US gasoline demand weighing on US crude
while supply shortages underpinning Brent.

artical name Asian stocks rebound with US interest rate hike

Asian stocks rebound with US interest rate hike

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