Asian stocks bounced back from losses earlier in the week, brushing aside data showing that U.S. wholesale prices rose 11% in April from a year earlier.
The regional rally was followed by a mixed and muted loved one on Wall Street. U.S. oil and futures prices were also higher.
Investors are puzzled over what will happen next with inflation and the US Federal Reserve’s response to it. Trading has been volatile, with indices fluctuating sharply as investors try to protect their portfolios from the effects of the highest inflation in decades.
Federal Reserve Chairman Jerome Powell, for the first time Thursday, for the first time received Senate approval for a second four-year term acknowledged that high inflation and weakness in other economies could hamper his efforts to avoid a recession.
Earlier, Powell tried to reflect the Fed’s efforts to raise interest rates in line with the so-called “soft landing” for the economy.
The Hong Kong Hang Seng index rose 2.2% to 19,805.34, while the Nikkei 225 in Tokyo jumped 2.8% to 26,461.49. South Korea’s Kospi was up 1.7% to 2,594.95, while in Sydney the S&P / ASX 200 was up 1.5% to 7,046.50.
The central bank is trying to fight rising prices by raising interest rates, pulling some currencies lower while the dollar rises. The Japanese yen has weakened sharply over the past few months, and the Chinese yuan, whose value against other currencies is regulated, has also weakened.
The euro also weakened amid fighting in Ukraine and uncertainty in Russian gas and oil supplies . The euro traded at $ 1.0397 early Friday, falling below the $ 1.0500 it had held for most of the week.
“European risk sentiment is being disrupted by news that Russia is cutting gas supplies in response to sanctions,” said Stephen Ines of SPI Asset Management.
“The euro (euro) fell by $ 1.05 and even made its way by $ 1.04 on the news. Indeed, it really underscores the uncertainty when we move forward with the threat and disruption of Russian energy supplies, ”he said.
The dollar was 128.96 yen compared to 128.42. Against the Chinese yuan, it was at 6.79 per dollar compared to about 6.41 yuan a month ago.
On Thursday, the S&P 500 closed 0.1% lower, to 3930.08, down 1.9% earlier in the day. The Dow Jones Industrial Average fell 0.3% to 31,730.30, while the Nasdaq rose 0.1% to 11,370.96.
The indices are at a rate of sharp weekly decline, which has prolonged the market downturn this year. This year, the reference S&P 500 decreased by 17.5%, and the Nasdaq – by 27.3%.
Shares of smaller companies held up much better than others in the market. Russell 2000 rose 1.2% to 1,739.38.
Another serious piece of inflation data sparked a wave of sales early Thursday, with technology stocks making the S&P 500 index the heaviest.
This was reported by the Labor Office In April, wholesale prices rose 11%. a year earlier adds to concerns that production costs are being passed on to consumers, which could divert costs by squeezing economic growth.
Wednesday’s Labor Department report on consumer prices became hotter than expected on Wall Street, showing greater-than-expected growth in prices excluding food and gasoline. This “core inflation” may be more predictable of future trends.
Inflation has worsened Russia’s invasion of Ukraine and the impact of the conflict on rising energy prices. Recent blockades in China amid fears over the revival of COVID-19 also exacerbated problems with supply chains and production at the center of rising inflation.
The impact of rising consumer prices has been global. on thursday Britain has declared its economy grew at the slowest pace of the year in the first quarter. This raises fears that the country may head into recession.
In other electronic trading on the New York Mercantile Exchange, US benchmark oil rose by $ 1.21 to $ 107.34 a barrel. On Thursday, it rose 42 cents to $ 106.13 a barrel.
Brent crude, which is the basis of pricing in international oil trading, added $ 1.45 to $ 108.90 per barrel.
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