Asian shares advance on back of rally on Wall Street
Asian shares were mostly higher Tuesday after U.S. stocks stormed back from sharp losses to log strong gains.
Tokyo and Seoul advanced, while Sydney fell.
Shanghai fell back on renewed concerns over pandemic lockdowns that might further crimp the world’s second-largest economy and hinder global economic growth.
The Shanghai Composite index fell 0.9% to 2902. 46, giving up early gains. It fell to 5.1% Monday.
Hong Kong’s Hang Seng, which lost 3.7% on Monday, was trading 0.7% higher at 20,000.69.
The Kospi in Seoul gained 0.5% to 2,669. 41 after the government reported the South Korean economy grew at a 3.1% annual pace in the first quarter of the year, up 0.7% from the previous quarter. The government has lifted COVID restrictions to allow the economy to recover from the pandemic. This is because case numbers have decreased after the introduction of the omicron variant.
” This should lead to a rebound in the most vulnerable parts of the service industry. A further drop in precautionary savings should give an additional boost to consumption,” Alex Holmes, Capital Economics, stated in a commentary. He said that private consumption is still below pre-pandemic levels and there is ample opportunity for a rebound.
In Tokyo, the Nikkei 225 rose 0.4% to 26,700. 11 and India’s Sensex gained 1.2% to 57,254.49.
Australia’s S&P/ASX 200 dropped 1.9% to 7,331.30.
US. benchmark oil gained 92 cents to $99. 46 per barrel in electronic trading on the New York Mercantile Exchange. It lost $3. 53 to $98. 54 on Monday.
Brent crude oil, which is used to price international oil, gained $1. 23 cents to $103. 39 per barrel.
The dollar slipped to 127. 89 Japanese yen from 128. 14 yen late Monday. The euro rose to $1. 0727 from $1.0713.
On Monday, the S&P 500 climbed 0.6% to 4,296. 12 after erasing an early 1.7% loss. Stocks of internet-related companies led the rally, including Twitter which rose 5.7% after Elon Musk, CEO of Tesla, agreed to buy it.
The Dow Jones industrial average rose 0.7% to 34,049. 46, while the Nasdaq composite rallied 1.3% to 13,004.85.
The S&P 500 is coming off a three-week losing streak, dogged by worries about the Federal Reserve’s plans to move faster in raising interest rates to curb high inflation.
Gains for several big tech-related stocks were the strongest forces lifting the S&P 500 Monday, including a 2.4% gain for Microsoft and a 2.9% rise for the Class A shares of Google’s parent, Alphabet.
Both will report their quarterly results on Tuesday.
Wall Street are in the midst one of the most important periods of earnings season. This week, Apple, Microsoft and Amazon, as well as the parent company of Google, will all be reporting. Since they’re among the biggest companies by market value, their movements hold the most sway over the S&P 500.
There are concerns that the Fed’s big interest-rate hikes could cause a sharp slowdown or even a recession in the U.S. economy.
Investors are looking for more information about how large companies in the technology, industrial, and retail sectors handle rising inflation and supply chain problems.
Inflation remains a key concern for investors. Investors are concerned about whether the Fed can raise rates enough to curb inflation, but not too much to cause a recession. The Federal Reserve chair indicated that the central bank could increase short-term interest rates by twice the usual amount at its next meeting, which will be held next week. The Fed has already raised its key overnight rate once, the first such increase since 2018.
Wall Street also will receive key economic data this week. On Tuesday, the Conference Board will release its April measure of consumer confidence. On Thursday, the Commerce Department will release its first quarter gross domestic product report.
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