Asian markets mostly up on weaker rate outlook
Asian action markets are trading mostly higher on Wednesday, following broadly positive signals from Wall Street overnight, as investor sentiment was bolstered by U.S. Fed Chairman Jerome Powell’s ruling out aggressive rate hikes interest rate, as feared earlier, after the announced 50 basis point hike. Asian markets closed mostly lower on Wednesday.
As widely expected, the Fed raised interest rates by 50 basis points and said two more similar hikes are likely after upcoming meetings. However, Powell added that the central bank did not plan to raise interest rates as aggressively as some had feared, with the aim of bringing high inflation back to its 2% target.
In addition, the Fed decided to start reducing its holdings of Treasuries, agency debt and agency mortgage-backed securities on June 1.
Geopolitical tensions also remained on investors’ radar as the European Union proposed a phased ban on Russian oil in the sixth round of sanctions against Moscow, its toughest sanctions to date against Russia.
Australia’s stock market is slightly higher on Thursday, recouping some of the losses from the previous three sessions, with the benchmark S&P/ASX 200 index remaining above the 7,300 level, following broadly positive signals from Wall Street overnight. next day, with gains in energy, materials and Technology shares. Investor confidence was boosted after US Fed Chairman Jerome Powell ruled out aggressive interest rate hikes, as feared earlier after the reported 50 basis point hike.
The benchmark S&P/ASX 200 gained 45.90 points or 0.63% to 7,350.60, after hitting a high of 7,354.80 earlier. The broader All Ordinaries index is up 60.10 points or 0.79% at 7,624.90. Australian shares ended slightly lower on Wednesday.
Among the major miners, Rio Tinto and OZ Minerals are up 0.4% each, while Fortescue Metals adds more than 2%, Mineral Resources gains almost 3% and BHP Group is up 0.5%.
Oil inventories are solid. Beach Energy is up nearly 3% and Origin Energy is up 0.4%, while Santos and Woodside Petroleum each gain nearly 2%.
In the tech space, WiseTech Global and Appen are up more than 5% each, while Xero and Block are up nearly 2% each. Zip grew by nearly 4%.
Among the big four banks, ANZ Banking is down almost 2% and Westpac is down almost 1%, while Commonwealth Bank is flat. National Australia Bank shed more than 2% despite reporting higher first-half cash earnings, in line with expectations, and increasing the dividend by more than 20%.
Among gold miners, Northern Star Resources is up nearly 2% and Newcrest Mining gains nearly 1%, while Evolution Mining, Resolute Mining and Gold Road Resources add more than 2% each.
Separately, Alliance Aviation shares soar nearly 25% after Qantas agreed to buy the charter operator for $919 million.
In economic news, Australia recorded a merchandise trade surplus of A$9.314 billion in March, the Australian Bureau of Statistics reported on Thursday. That beat expectations of an A$8.5 billion surplus and was up from A$7.457 billion in February. Imports fell A$1.949 billion or 5.0% to A$40.139 billion, due to lower imports of processed industrial supplies. Exports fell by A$72 million (0%) to A$49.453 billion, due to lower exports of non-monetary gold and cereals and cereal preparations.
In the currency market, the Australian dollar is trading at $0.724 on Wednesday.
The Japanese stock exchange is closed on Wednesday due to Children’s Day. Japanese stocks ended slightly lower on Monday ahead of the Constitution Day holiday on Tuesday and the Greenery Day holiday on Wednesday.
In the currency market, the US dollar is trading in the lower range of 129 yen on Wednesday.
Elsewhere in Asia, New Zealand, China, Hong Kong, South Korea, Malaysia and Taiwan are higher by 0.2-0.9% each. Singapore is relatively flat. Markets in South Korea and Japan are closed for Children’s Day, while Indonesia is closed for Eid-ul-Fitr.
On Wall Street, stocks rose sharply as markets neared the close on Wednesday after showing a lack of direction for much of the session. The major averages all showed substantial moves higher, adding to the gains posted at the start of the week.
Major averages ended the session just off their best levels for the day. The Dow Jones jumped 932.27 points or 2.8% to 34,061.06, the Nasdaq jumped 401.10 points or 3.2% to 12,964.86 and the S&P 500 jumped 124.69 points or 3% at 4,300.17.
Meanwhile, major European markets turned lower on the day. While Germany’s DAX index fell 0.5%, Britain’s FTSE 100 index slid 0.9% and France’s CAC 40 index fell 1.2%.
Crude oil prices rose sharply on Wednesday, buoyed by the European Union’s decision to impose sanctions on Russian oil. West Texas Intermediate crude oil futures for June climbed $5.58 or 5.5% to $107.79 a barrel.
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