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Asian Markets Rise Ahead of US Inflation Data | Economic news

By JOE McDONALD, AP Business Writer

BEIJING (AP) — Asian stock markets rose on Wednesday as investors awaited U.S. inflation data on fears it could lead to further interest rate hikes.

US futures rose slightly and oil prices rebounded from Tuesday’s plunge, but remained below $100 a barrel.

Wall Street’s benchmark S&P 500 index fell on Tuesday ahead of the government’s release of consumer price data for June. A new set of results from the company is expected this week.

Investors fear that action by US and European central banks to rein in inflation, which is at its highest level in four decades, could derail global economic growth. The Federal Reserve raised its benchmark rate by 0.75 percentage points last month, tripling its usual margin, and two members of its rate-setting panel say they favor a similar hike this month.

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High US inflation ‘could cement the case’ for tighter Fed policy, but traders could choose to ‘accept the stance of peak inflation’ as oil prices fall, Yeap said IG’s Jun Rong in a report.

The Shanghai Composite Index gained 0.3% to 3,290.01 and Tokyo’s Nikkei 225 gained 0.4% to 26,437.96. The Hang Seng in Hong Kong rose 0.5% to 20,941.78.

The Kospi in Seoul was up 0.6% at 2,329.56, while Sydney’s S&P-ASX 200 recovered from earlier losses to hold steady at 6,606.30. The Indian Sensex edged up 0.1% to 53,938.84. New Zealand rose while Southeast Asian markets fell.

South Korea’s central bank on Wednesday raised its key rate by an unprecedented 0.5 percentage point to 2.25%, seeking to rein in price increases that have been aggravated by soaring oil prices. energy and raw materials and the disruption caused by Russia’s war against Ukraine.

The New Zealand central bank also raised its benchmark interest rate by half a percentage point to 2.5%. It was the third time this year that the Reserve Bank of New Zealand raised the key rate by 50 basis points, following increases in April and May. There was also a quarter-point increase in February.

The S&P 500 lost 0.9% to 3,818.80, down for a third day. Technology, healthcare and energy stocks accounted for a significant portion of the losses.

The Dow Jones Industrial Average slid 0.6% to 30,981.33 and the Nasdaq composite slid 0.9% to 11,264.73.

Major companies are expected to release their second quarter results in the coming weeks.

Expectations seem mixed. Analysts predict growth of 5.1% for S&P 500 companies, which would be the weakest since the end of 2020, according to FactSet.

US inflation jumped as the economy recovered from the coronavirus pandemic.

Russia’s invasion of Ukraine drove up the prices of oil and other commodities. Global manufacturing supply chains have been disrupted by Chinese efforts to contain virus outbreaks that have temporarily shut down Shanghai and other industrial hubs.

The US bond market is giving warning signals of a possible recession.

The 10-year Treasury yield, or the difference between the market price and the payment at maturity, was flat at 2.98%. It is lower than the two-year Treasury yield, indicating that some investors expect a recession in the next two years.

In energy markets, benchmark U.S. crude gained 19 cents to $96.03 a barrel in electronic trading on the New York Mercantile Exchange. The contract plunged from $8.25 on Tuesday to $95.84. Brent crude, the price basis for international trade, climbed 27 cents to $99.76 a barrel in London. It fell from $7.61 the previous session.

The dollar rose to 137.00 yen from 136.77 yen on Tuesday. The Euro fell slightly to $1.0035 from $1.0045.

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