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Asian stocks rise after Wall St nears bear market

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FILE – Trader Patrick King works on the floor of the New York Stock Exchange, Thursday, May 12, 2022, in New York. Stocks fell sharply on Wednesday as stocks fell sharply on Wednesday as the Dow Jones Industrial Average fell more than 1,100 points, or 3.6%, and the tech-heavy Nasaq fell 4.7%. The S&P 500, the benchmark for many index funds, fell 4%. (AP Photo/John Minchillo, File)

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Asian stock markets rose on Friday after Wall Street edged closer to bearish territory, China cut a key interest rate and Japanese inflation rose slightly.

Market benchmarks in Shanghai, Tokyo, Hong Kong and Sydney grew. Oil prices fell more than $1 a barrel.

Wall Street’s benchmark S&P 500 lost 0.6% on Thursday as rising interest rates, Russia’s war on Ukraine and China’s economic slowdown added to investor unease. The benchmark is down 18.7% from its January peak and close to the 20% decline that defines a bear market.

“This is unlikely to be the bottom, given the tightening of financial conditions ahead,” Mizuho Bank’s Tan Boon Heng said in a statement. “Reality may still be harsher than expectations.”

The Shanghai Composite Index rose 0.7% to 3,118.79 after China’s central bank cut its rate on a five-year loan in a bid to shore up weak home sales by cutting mortgage costs. The one-year lending rate that affects commercial borrowers remained unchanged.

That suggests Beijing is “trying to maintain targeted easing and we shouldn’t expect large-scale stimulus,” Capital Economics’ Julian Evans-Pritchard said in a report.

The Nikkei 225 in Tokyo jumped 1.2% to 26,712.36 after the government announced inflation had risen to 2.5% in April from 1.3% the previous month. This is the first time since 2008 that inflation has exceeded the Japanese central bank’s 2% target.

Core inflation, which excludes fresh food and energy, rose from 1.5% to 2.1%, the highest level since 2015, allowing tax hikes. But the central bank is unlikely to change its low interest rate policy given the weakness in the economy, which contracted in the last quarter, economists said.

With “GDP not yet above its pre-virus level and wage growth still subdued, this will not convince the Bank (of Japan) that tighter monetary policy is needed,” Marcel said. Capital Economics’ Thieliant in a comment.

The Hang Seng in Hong Kong gained 1.8% to 20,484.02 and the Kospi in Seoul rose 1.5% to 2,633.92.

Sydney’s S&P-ASX 200 added 1% to 7,138.70. New Zealand and Southeast Asian markets also grew.

On Wall Street, the S&P 500 fell to 3,900.79. The Dow Jones Industrial Average fell 0.8% to 31,253.13. The Nasdaq slipped 0.3% to 11,388.50.

Investors are watching the Federal Reserve for hints of further interest rate hikes to quell inflation that is at its highest level in four decades. Fed Chairman Jerome Powell said this week that the US central bank may take more aggressive action if price pressures do not ease.

Traders are also worried about China’s economy after official data showed factory and consumer activity in April was weaker than expected after Shanghai and other industrial hubs were shut down to fight the coronavirus outbreaks. coronavirus outbreaks.

U.S. tech stocks fell on Thursday, accounting for much of the S&P 500’s decline.

Cisco Systems fell 13.7% after the router and switch vendor cut its profit forecast amid supply chain constraints. Synopsis jumped 10.3% after the software company raised its financial forecast for the year.

Retailers and other businesses that rely on direct consumer spending have mostly grown. Amazon added 0.2% and Expedia climbed 5.3%.

In energy markets, benchmark U.S. crude fell $1.22 to $108.67 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.62 on Thursday to $112.21. Brent crude, the price basis for international oil trade, fell 84 cents to $111.20 a barrel in London. It gained $2.93 the previous session at $112.04.

The dollar gained 127.85 yen from 127.74 yen on Thursday. The euro fell to $1.0565 from $1.0598.