Asian Shares Higher as Fed May Raise Interest Rates
Asian shares rose on Thursday after the Federal Reserve said higher US interest rates may be needed to curb inflation. Tokyo, Shanghai, and Sydney were promoted. Hong Kong refused. Oil prices rose after falling below $100 a barrel this week. Wall Street’s benchmark S&P 500 index gained 0.4% on Wednesday after notes from the Fed’s last meeting suggested that an even tighter stance may be to return inflation to its 2% target. Fed officials confirmed that this could decline the economy.
Investors fear that aggressive rate hikes by the US and Europe contain price increases that are at four-decade highs; It may hamper global economic activity. The Shanghai Composite rose 0.5% to 3,372.42. The Nikkei 225 rose to 26,399.23, up 1.1%. Hang Seng reached 21,498.91 and lost 0.4%.
The Kospi rose 2.1% to 2,340.03. The S&P-ASX 200 was up 0.4% at 6,618.90. The Sensex opened at 54,089.79. New Zealand fell. Southeast Asian markets advanced. The S&P 500 increased to 3,845.08 on Wall Street. The Dow added 0.2% to 31,037.68. The Nasdaq composite rose to 11,361.85, a total of 0.3%. Fed last month raised its key interest rate from 1.5% to 1.75%. This is the largest increase in nearly three decades.
Chairman Jerome Powell at the time proposed raising the rate by half or three-quarters of a point. That’s three times the Fed’s usual limit. Remarks released Wednesday from the federation’s June 14-15 meeting confirmed that other officials agreed that such an increase would likely be appropriate.
Inflation increased. Russia’s attack on Ukraine has pushed up oil prices and other commodities. China’s anti-virus crackdown that has shut down Shanghai and other industrial hubs disrupted supply chains. Oil prices ended under $100 a barrel for the first time after May. However, US crude is still up more than 30% this year. In electronic trading on the New York Mercantile Exchange, the price of American crude oil rose by 46 cents; In total, it was 98.99 USD per barrel. The contract lost 97 cents on Wednesday. It amounted to 98.53 dollars per barrel. The price of Brent oil rose by 45 cents in London, reaching a total of 101.16 USD per barrel. It was down $2.08 in the previous session to $100.69. The dollar fell to 135.69 yen. The euro rose to $1.0201.
London stocks opened higher on Thursday after positive sessions in Asia and the US. Investors are thinking about the last minutes of the US Federal Reserve. The FTSE 100 was called to open around 80 points lower at 7,188. Analysts estimate that European and US futures will rise once again. Investors are poised to continue the momentum where they left off yesterday. Traders are also studying the FOMC Minutes, which confirmed the Fed’s continued support for controlling inflation.
The S&P 500 recorded its third consecutive day of gains yesterday, which is an encouraging sign. However, traders should approach the markets with caution. There are too many moving parts and too many unknown factors. Recession worries persist. Wall Street looks set for another volatile earnings season. It will bring a lot of inflation to the health of consumers, but also the outlook of the US economy.
According to analysts, the Federal Bank is fully committed to reducing inflation under any conditions. On domestic shores, politics is likely to remain in focus. Boris Johnson retains his position after MPs resign. Persimmon said weekly sales for the first half of the year were up 1% compared to last year. This is due to strong demand.
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