TOKYO (AP) — Global stocks rose Thursday as investors awaited a much-anticipated speech by the chairman of the U.S. Federal Reserve on interest rates later in the week.
Indexes rose in Europe in early trade after Japan, Australia, South Korea and China ended higher. In Hong Kong, trading was temporarily halted by the storm.
Market watchers say share prices are likely to fluctuate for some time, whether the focus is on inflation control or recession risks. Asia has been in a wait-and-see mood in recent sessions as markets await signals from the Fed.
“Market participants may want to see a more consistent recovery as an indicator of policy success before confidence fades,” said Yap Jun Rong, market strategist at IG in Singapore.
France’s CAC 40 added 0.6% in early trade to 6,424.17, while Germany’s DAX rose 0.7% to 13,312.88. Britain’s FTSE 100 rose 0.6% to 7,519.01. U.S. stocks were set to rise, with Dow futures up 0.6% at 33,162.00. S&P 500 futures rose 0.8% to 4,177.75.
Chinese stocks fell this week amid a recent rate cut by the People’s Bank of China, which also announced stimulus policies.
The Bank of Korea raised its key rate by 0.25 percentage points to 2.5% in a bid to tackle inflation, even as signs of inflationary pressures appeared to be easing.
“Currently available information indicates that the risks of a global economic downturn have increased under the influence of the prolonged crisis in Ukraine and significant rate increases in the main developed countries, while inflation remains high,” the bank said in a statement.
The recent spike in fresh produce prices remains a risk, say market analysts. The Bank of Korea said the country’s gross domestic product — the total value of the country’s products and services — is forecast to grow by 2.6% in 2022 and 2.1% in 2023.
South Korea’s economy has rebounded quickly as consumption recovered and restrictions related to COVID-19 eased, but growth is likely to weaken as exports decline amid a global slowdown, the central bank said.
Japan’s benchmark Nikkei 225 rose 0.6% to 28,479.01. Australia’s S&P/ASX 200 rose 0.7% to 7,048.10. South Korea’s Kospi rose 1.2% to 2,477.26. Hong Kong’s Hang Seng rose 3.6% to 19,968.38 after trading was delayed earlier due to the storm. The Shanghai Composite rose 1.0% to 3,246.25.
Stocks rallied over the summer on hopes that inflation was near its peak and that the U.S. Federal Reserve might raise interest rates less aggressively than previously feared. But recent comments from Fed officials cooled such expectations, sending Wall Street into its worst day in months on Monday. Upbeat economic reports, meanwhile, underscore the risk of a recession.
Wall Street remains in the spotlight Friday when Fed Chairman Jerome Powell delivers a speech at the annual economic conference in Jackson Hole, Wyoming. It has been the setting for market-moving speeches in the past, leading investors to hope that Powell will offer clarity on further rate hikes.
Higher interest rates slow the economy in hopes of reducing inflation. But they also risk stifling the economy if they act too aggressively, and they cut prices for all kinds of investment.
In energy trading, benchmark US crude rose 19 cents to $95.08 a barrel. Brent oil, the international standard, added 40 cents to $101.62.
The US dollar fell to 136.57 yen from 137.09 yen at the foreign exchange market. The euro was little changed at almost $1.00.
AP Business Writer Stan Chow contributed to this report.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
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