Most Asian markets rose on Monday after a late afternoon rally on Wall Street that capped a volatile week for global equities, although traders remain nervous over the Federal Reserve’s plan to hike interest rates. interest as it battles soaring inflation.
The Nasdaq led the strong end in U.S. stocks on the back of a 7% rise in heavyweight Apple, which posted stunning fourth-quarter earnings that sparked optimism about consumer spending and economic recovery.
And the strong performance – which was also helped by strong US economic data – trickled down to Asia, where trading was dampened by investors pulling back ahead of the three-day Lunar New Year break that starts Tuesday.
Tokyo, Hong Kong, Singapore, Wellington, Manila and Jakarta were all in positive territory, although Sydney was down slightly. Shanghai, Seoul and Taipei were closed for the holidays.
The gains followed a period of turmoil in global markets as the Fed prepares to withdraw the broad financial support put in place at the start of the pandemic, which was a key driver of a recovery in shares for nearly two years.
And although greater volatility is expected as the bank raises borrowing costs, commentators remain optimistic.
The recent selloff “marks a long overdue correction rather than the start of a bear market,” analysts at BCA Research Inc.
They added: “Equities often suffer a period of indigestion when bond yields suddenly rise, but generally rebound as long as yields don’t move into economically restrictive territory.”
Still, observers continue to debate the Fed’s likely moves as inflation sits at its highest level in four decades, with some saying it could rise as much as seven times before 2023, with an initial move of 50 basis points in March.
In an interview with the Financial Times published on Saturday, Atlanta Fed chief Raphael Bostic said he expected three hikes this year, but warned that “all options are on the table for each meeting. “.
He stressed that he would be “comfortable” with the idea of making a raise at each of the bank’s seven meetings this year.
Oil prices soared more than one percent on expectations that demand will continue as economies reopen and people start to travel again, while concerns over a Russian invasion of Ukraine have fueled fears of possible supply disruptions.
Analysts have said that if Russia sends troops into the country, crude prices could top $100 for the first time since 2014.
– Key figures around 02:30 GMT –
Tokyo – Nikkei 225: 1.0% higher at 26,981.89 (pause)
Hong Kong – Hang Seng Index: UP 0.7% to 23,712.23
Shanghai – Composite: Closed for a public holiday
Dollar/yen: UP to 115.53 yen against 115.24 yen on Friday evening
Euro/dollar: UP at $1.1159 vs. $1.1158
Pound/dollar: UP to $1.3412 from $1.3389
Euro/pound: UP at 83.20 pence against 83.16 pence
West Texas Intermediate: UP 1.5% to $88.12 a barrel
North Sea Brent: 1.4% up to $91.33 a barrel
New York – Dow: UP 1.7% to 34,725.47 (closing)
London – FTSE 100: 1.2% drop to 7,466.07 (closing)
— Bloomberg News contributed to this story —
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