Asian Shares Rise After US inflation and Rate Boost Fears
Asian shares rose on Thursday after higher US inflation boosted expectations of a rate hike. Investors fear this will slow economic growth. Tokyo, Hong Kong, Shanghai, and Sydney were promoted. Wall Street futures were lower. The price of oil has increased. Wall Street’s benchmark S&P 500 index lost 0.4% on Wednesday; After data showed that US consumer inflation accelerated to 9.1% in June. This happened despite three rate hikes by the Federal Reserve this year. Investors fear that aggressive action by the Federal Reserve and other central banks to reduce inflation, which is at a four-decade high, may hamper global growth. Rise worries hit markets more than inflation concerns. The Shanghai Composite Index rose to 3,295.83, up 0.4% overall. The Hang Seng rose 0.3% to 20,855.29.
The Nikkei 225 reached 26,689.95, up 0.8% overall. Panasonic rose 1.1% after the battery maker announced plans to build a multibillion-dollar factory supplied to Tesla and other automakers in Kansas. The S&P-ASX 200 added 0.4% to 6,646.60. After data was released, employment was gained more than expected in June. Kospi grew by 0.1% and reached 2,330.74. The Sensex rose 0.4% to a total of 53,701.38. Jakarta and New Zealand advanced. Singapore and Bangkok declined.
Shares and Fed
The Federal Reserve, central banks in South Korea, the United Kingdom, and some other countries have raised interest rates to curb rising prices. The European Central Bank has similar plans. Traders expect another Fed rate hike this month, likely to match last month’s 0.75 percentage point increase. This is the largest in the last 28 years and is three times higher than the normal limit.
Fed officials say the recession is possible; however, not certain. They mark a powerful US job space despite high borrowing values. On Wall Street, the S&P fell to 3.801.78. The Dow was down 0.7% to 30,772.79. The Nasdaq Composite was up 0.2% at 11,247.58. Traders await the latest quarterly results from major US companies over the next few weeks.
In energy markets, US crude oil rose 56 cents in electronic trading on the New York Mercantile Exchange; And it amounted to 96.86 dollars per barrel. The contract rose 46 cents to $96.30. Brent crude rose to $100.27 in London, up 70 cents. It added 8 cents in the previous session. The dollar rose to 138.37 yen. The euro fell to $1.0024.
London shares fell in early trading Thursday amid continuing concerns about a global slowdown. Investors kept an eye on Morgan Stanley’s main pool earnings. From JPMorgan and similar companies. The FTSE 100 was down 0.2% at 7,139.10. According to analysts, Equity markets struggle to understand what’s next when it comes to valuation due to the economic slowdown and rising prices of bond markets.
The second puzzle is how many more rate hikes are coming, as long as central banks are cutting rates again. On the shores of the house, market participants discussed the latest royal institution’s feeding. This showed that house prices continued to rise in June; however, at a slower pace than previously seen.
The net balance of 65% of respondents indicates an increase in apartment prices. This remains well above 13% in the long run. However, this is down from both April’s figure of 78% and May’s 73%.
Rising inflation has seen the Bank of England raise borrowing costs five times since December. Nevertheless, house prices have been broadly supported by a lack of supply despite softening demand and the cost of living crisis. RICS found that new properties listed for sale were broadly unchanged in June, while new buyers’ requests fell for the third month in a row. -27% of the respondents indicate a decline in the interest of potential buyers.
Sales volume also declined in June, with -13% marking a decline in newly negotiated sales. -9% balance predicted a decrease in transactions in the coming months; 37% expect prices to rise next year. According to RICS’s chief economist, prices are so far stable across much of the housing market. Stock shortages continue to be a feature highlighted by many survey respondents. Barratt Developments fell after its annual profit beat forecasts following rising demand for new homes. However, he warned of an increase in construction costs.
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