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Global shares mostly fall as investors mull likely rate hike

TOKYO (AP) – Global shares were mostly lower yesterday following a national holiday in the United States (US) while oil prices surged following an attack on an oil facility in the United Arab Emirates that killed at least three people.

Benchmark US crude rose USD1.44, or 1.7 per cent, to USD85.26 a barrel in electronic trading on the New York Mercantile Exchange. It gained USD1.70 to USD83.82 per barrel on Monday.

Brent crude, the basis for pricing international oil, added USD1.05 to USD87.53 a barrel.

In Europe, France’s CAC 40 dropped 1.2 per cent in early trading to 7,117.76, while Germany’s DAX slipped 1.0 per cent to 15,767.35. Britain’s FTSE 100 was down 0.7 per cent at 7,555.82. The future for the Dow industrials was down 0.6 per cent at 35,577.00. The S&P 500 future fell nearly 1.0 per cent to 4,610.50.

The two-year Treasury rose above one per cent, adding to expectations the US Federal Reserve will soon raise rates to counter inflation.

Rising bond yields tend to put pressure on stocks, as investors reassess their asset allocations and take a closer look at share prices, especially higher valued ones.

The yield on the 10-year Treasury was at 1.84 per cent yesterday. It also has risen in recent days.

The Bank of Japan wrapped up a two-day policy meeting with no major changes. Its benchmark interest rate remains at a longstanding minus 0.1 per cent.

Price increases in Japan have been less pronounced than it is in the US and some other nations, though the central bank raised its inflation forecast for the fiscal year that begins in April to 1.1 per cent from a previous estimate of 0.9 per cent.

The super-easy monetary policy of the Japanese central bank is expected to stay unchanged for the time being, as the nation grapples with surging cases of COVID infections set off by the Omicron variant.


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