Business Maverick

Business Maverick

Asia Joins Stock Rebound as Buyers Reassess Rout: Markets Wrap

The author argues that the dramatic recent increase in oil prices affects oil-importing countries directly and will feed into all other prices through rising input and transport costs. (Image: Adobe Stock)

Asia stocks joined a global equities rebound Thursday as dip-buyers leaned into speculation that weeks of market gyrations may have priced in the economic impact of the conflict in Ukraine. Oil pared a sharp decline. 

Japan stocks jumped as much as 3% at the open and indexes climbed in China, Hong Kong and Australia. U.S. futures wavered between red and green after benchmark indexes in America and Europe notched their strongest single-day gains since 2020.Amazon.com Inc. surged more than 10% in late trading after the online retailer announced a share split and $10 billion buyback plan, which will help remove a key hurdle for its inclusion in the price-weighted Dow Jones Industrial Average. In Asia’s morning, mining giant Rio Tinto Group said it’s joined the ranks of multinationals shunning Russia following the country’s invasion of Ukraine.

The searing commodity markets gains have stalled, though oil has rallied from steep losses overnight to trade just below $110 a barrel. The United Arab Emirates said it will call on the OPEC+ alliance to boost oil output faster, a dramatic U-turn that could set the country against fellow members. Gold held losses after falling from a 19-month high.

The dollar edged higher after sliding on the improved risk appetite, and Japan’s yen neared a five-year low versus the greenback. The 10-year Treasury yield hovered around 1.94%.

The S&P 500 Index rebounded the most since June 2020

These reversals are the latest twist in volatile markets as investors assess the risk of an inflation shock that could derail global growth just as the Federal Reserve prepares what’s expected to be the first of several rate hikes next week. U.S. consumer price inflation is likely to hit another multi-decade high in data due Thursday, and though the searing gains in commodities seem to have stalled for now, markets are still beholden to developments in the war in Ukraine and Russian sanctions.

Market sentiment picked up Wednesday after a top foreign policy aide to Ukraine’s president said the country is open to discussing Russia’s demand for neutrality as long as it’s given security guarantees.

“You’re going to see more dispersion” in equities, Erin Browne, multi asset portfolio manager at Pacific Investment Management Co., said on Bloomberg Television. “We are expecting that it’s going to be a persistently higher inflation environment for the rest of 2022, what you’re starting to see is not only the first-degree hit of commodities that are likey to remain higher, but you’re seeing that feed through with some of the supply chain challenges that are going to continue to be disrupted and exacerbated because of the conflict in Ukraine. “

Meanwhile, former top prosecutor Yoon Suk-yeol won election as South Korea’s president, returning the conservative opposition to power after five years and signaling a hawkish turn in the country’s relations with China and North Korea.

In cryptocurrencies, Bitcoin traded back below $42,000, after a sharp rally in digital tokens sparked by optimism about an impending U.S. overhaul of crypto oversight that could provide regulatory clarity for investors.

Russia’s ruble tumbled as trading in the currency resumed, with the country reeling under economic sanctions.

Read:
Dip-Fueled Mega-Rallies Leave Veteran Stock Managers Unconvinced
Low-Conviction Markets Becoming Gallery of Heart-Stopping Swings

 

For more markets news, follow our Markets Live blog.

Some of the main moves in markets:

Stocks

  • S&P 500 futures were little changed as of 11:36 a.m. in Tokyo. The index rose 2.6%
  • Nasdaq 100 futures were up 0.1%. The gauge rose 3.6%
  • Japan’s Nikkei 225 jumped 3.5%
  • Australia’s S&P/ASX 200 Index rose 1.7%
  • China’s CSI climbed 2.9%
  • Hang Seng Index rose 2.2%

Currencies

  • The Japanese yen weakened to 116.06 per dollar
  • The offshore yuan was at 6.3252 per dollar
  • The Bloomberg Dollar Spot Index edged up 0.1%
  • The euro slipped 0.2% to $1.1054

Bonds

  • The yield on 10-year Treasuries slipped one basis points to 1.94%
  • Australia’s 10-year bond yield rose two basis points to 2.33%

Commodities

  • West Texas Intermediate crude slipped 0.7% to $107.88 a barrel
  • Gold fell 0.8% to $1,975.18 an ounce
Gallery

Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.