Global shares mixed after rebound on Wall Street

TOKYO (AP) — Global shares were mixed yesterday after Wall Street’s recovery from its latest bout of jitters over future central bank policies.

France’s CAC 40 shed 0.1 per cent in early trading to 6,594.02, while Germany’s DAX slipped 0.3 per cent to 15,550.99. Britain’s FTSE 100 added 0.3 per cent to 7,079.95. The future for the Dow industrials was almost unchanged while that for the S&P 500 inched down less than 0.1 per cent.

Japan’s benchmark Nikkei 225 jumped 3.1 per cent to finish at 28,884.13. Australia’s S&P/ASX 200 surged 1.5 per cent to 7,342.20. South Korea’s Kospi rose 0.7 per cent to 3,263.88. Hong Kong’s Hang Seng fell 0.6 per cent to 28,309.76, while the Shanghai Composite gained 0.8 per cent to 3,557.41. Shares rose in India, Taiwan and Southeast Asia.

Federal Reserve Chair Jerome Powell said the economy is growing at a healthy clip, and that has accelerated inflation. In written testimony delivered at a congressional oversight hearing yesterday, Powell reiterated his view that inflation’s recent jump to a 13-year high will prove temporary.

Powell’s remarks follow a meeting of the Fed’s policymaking committee last week, when central bank officials signalled they were prepared to raise rates earlier than they had previously suggested.

But despite the reassurance from Powell, renewed coronavirus outbreaks are clouding the outlook in much of Asia. “Much of the region is dealing with renewed waves of COVID-19 infections. These waves, especially in the case of India, Indonesia and some other countries in Southeast Asia, are the most severe yet,” said Venkateswaran Lavanya at Mizuho Bank in Singapore.

Investors are still figuring all the ramifications of the Fed’s forecast that may start raising short-term interest rates by late 2023.

That’s earlier than previously thought. The Fed also began talks about slowing programme meant to keep longer-term rates low, an acknowledgment of the strengthening economy and threat of higher inflation.

The market’s immediate reaction to last week’s Fed news was to send stocks lower and interest rates higher. Higher rates would make stock prices, which have been climbing faster than corporate profits, look even more expensive than they do already.

In energy trading, benchmark United States (US) crude oil lost 53 cents to USD72.59 in electronic trading on the New York Mercantile Exchange. It jumped USD1.83 to USD73.12 on Monday.

Brent crude, the international standard, fell 46 cents to USD74.44 a barrel.

In currency trading, the U.S. dollar rose to 110.48 Japanese yen from JPY110.31. The euro fell to USD1.1886 from USD1.1914.