Asian stocks rise after Wall Street rally led by tech stocks | lifestyles

By YURI KAGEYAMA – AP Business Writer

TOKYO (AP) – Asian stocks rose on Wednesday after a Wall Street rally led by tech companies, although investors remain concerned about the war in Ukraine and inflation.

Despite concerns about rising energy costs, benchmarks were higher across the Asian region. Oil prices rose as the dollar strengthened against the Japanese yen.

Investors are also keeping a close eye on what could happen if President Joe Biden attends a NATO meeting and an EU summit in Europe on Thursday, where sanctions and the Russian oil embargo are likely to top the agenda.

Ukrainian President Volodymyr Zelenskyy was scheduled to deliver a much-anticipated online speech in the Japanese parliament. Japan, which adhered to a pacifist constitution after being defeated in World War II, has taken an unusually vocal position on the war in Ukraine and has sided with Western nations on sanctions against Russia.

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Japan’s benchmark Nikkei 225 rose 2.7% to 27,947.26 in morning trade. Australia’s S&P/ASX 200 rose 0.5% to 7,374.10. South Korea’s Kospi was up 0.7% to 2,730.13. Hong Kong’s Hang Seng was up 2.4% to 22,410.06, while the Shanghai Composite was up 0.5% to 3,274.69.

“With few levers left to keep Russia from military intervention, the market is beginning to price in the loss of a significant amount of Russian oil that needs to be refilled. It could be years before Russian oil markets normalize, if ever,” said Stephen Innes, Managing Partner at SPI Asset Management.

Bond yields rose sharply for the second straight day, reflecting expectations of more aggressive rate hikes by the Federal Reserve as the central bank scrambles to quell the highest inflation in decades. The yield on the 10-year government bond rose to 2.41% on Wednesday from 2.30% late Monday. The yield, which drives interest rates on mortgages and other consumer credit, was 2.14% late Friday.

The rise in bond yields and stocks comes a day after Federal Reserve Chair Jerome Powell said the central bank stands ready to raise interest rates more aggressively if needed to fight inflation. Powell said the Fed will raise its short-term reference rate by half a point at multiple Fed meetings if necessary.

“Perhaps investors are feeling that if the Fed takes a more proactive approach early on, it won’t need to hit the brakes later,” said Sam Stovall, chief investment strategist at CFRA.

Technology companies led Tuesday’s rally.

The S&P 500 rose 1.1% to 4,511.61, with more than 70% of stocks in the benchmark index gaining. The Dow Jones Industrial Average gained 0.7% to 34,807.46. The tech-heavy Nasdaq rose 2% to 14,108.82.

Smaller company stocks also rallied. The Russell 2000 Index rose 1.1% to 2,088.34.

Markets were restless as Wall Street adjusts to slower economic growth after federal spending on various stimulus measures eased.

“It’s actually pretty normal, but it doesn’t feel normal because the last couple of years have been really strong,” said Matt Stucky, senior portfolio manager at Northwestern Mutual Wealth.

Last Wednesday, the central bank announced a quarter-point rate hike, the first rate hike since 2018. The Fed has not raised interest rates by half a point since May 2000.

Energy and commodity prices were already high as demand outstripped supply on the back of the global economic recovery, but the war in Ukraine has pushed oil, wheat and other prices even higher. These higher costs and shipping issues make it more expensive for businesses to operate. Many of these costs have been passed on to consumers, and higher prices for food, clothing, and other commodities could prompt them to cut spending, resulting in slower economic growth.

Technology and communications stocks drove a large portion of the S&P 500’s gains on Tuesday, as did companies that rely on consumer spending. Apple was up 2.1% and Twitter was up 2.6%. Nike gained 2.2% after reporting better-than-expected third-quarter financial results. Energy stocks slipped as oil prices fell.

Banks helped propel the market higher as bond yields continued to rise. Higher bond yields allow banks to charge more lucrative interest rates on loans. Bank of America was up 3.1% and JPMorgan Chase was up 2.1%.

In energy trading, US benchmark crude rose $1.22 to $110.49 a barrel. Brent, the international standard, rose $1.47 to $116.95 a barrel.

Investors will soon start preparing for the next round of corporate earnings reports as the current quarter draws to a close at the end of March, and this could provide a clearer picture of how industries continue to deal with rising costs.

In forex trading, the US dollar rose to 121.02 Japanese yen from 120.81 yen. The euro was little changed, trading at $1.1034 versus $1.1033 the previous day.

AP Business Writers Damian J. Troise and Alex Veiga contributed.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, transcribed or redistributed without permission.

Updated: March 23, 2022 — 4:37 am

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