Asia shares surge as investors anticipate lower interest rate rises by Stocksak

© Stocksak. FILE PHOTO – People pass by an electronic display showing Japan’s Nikkei share market index in a Tokyo conference hall, Japan, June 14, 2022. REUTERS/Issei Kato/File Photo

By Ankur Banerjee

SINGAPORE, (Stocksak), Thursday: Asian shares rose on Thursday as investors began to believe that major central bank could slow down the pace at which interest rate rises in the next months. However, commodities and treasury yields were pushed lower by the dollar’s retreat.

MSCI’s broadest index of Asia-Pacific shares, which excludes Japan, was 1.59% higher. This marked the third consecutive session of gains. The index is down by approximately 2% over the month.

The shares of Australia’s resource-rich share index rose 0.81% while the open was 0.09% lower.

China’s stock markets opened 0.1% higher Friday. Hong Kong’s was up 2.6% at the opening.

China stocks have experienced a turbulent week. Monday’s selloff was the highlight. Global investors dumped Chinese assets in fear that President Xi Jinping’s New Leadership Team would place ideology above the economy.

Investors are increasingly speculative that the Federal Reserve and other central banks will halt their aggressive rate-hike policy, which has soothed investor jitters. This has helped to blunt the dollar’s rally.

“Yields tend to be lower globally because the earlier run up of expectations for central bank tightening have been reduced a bit more,” said Taylor Nugent (OTC:) in Sydney.

Nugent also noted the Bank of Canada on Wednesday announced a smaller-than-expected rate rise of 50 percentage points, and saying it fanned expectations that the Fed would start the shift to a similar sized rate rises in December.

U.S. Treasury yields fell due to a weaker dollar, and expectations of the Fed becoming lesshawkish. [US/]

While earnings reports from Facebook (NASDAQ) parent Meta Platforms Inc on Wednesday, and Samsung Electronics Co Ltd (OTC:) Co Ltd on Wednesday raised concerns about a downturn. This comes after many of Europe’s biggest banks warned of increasing risks as the economy collapses.

The euro climbed above $1 on the currency markets for the first time in five week, peaking at $1.00935. Investors waited for a rate decision by the European Central Bank (ECB). Markets expected it to announce a 75 bp rate increase. .

Sterling was trading at $1.1624 after hitting a session high at $1.1645.

The yen gained 0.18% against the greenback, averaging 146.09 dollars.

Gold prices have also risen due to the slide in the dollar, reaching a two-week high Wednesday.

After surging more that 3% in the previous session, oil prices continued to rise on Thursday in early Asian trade.

Futures rose 25cs or 0.3% to $95.94 per barrel by 0015 GMT. U.S. West Texas Intermediate crude oil (WTI), rose 0.2% to $88.10.

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Stocksak Editorial

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