24 C
Brunei
Tuesday, August 9, 2022
24 C
Brunei
Tuesday, August 9, 2022
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    Global stocks higher after Fed considers rate hikes

    BEIJING (AP) – Global stock markets and Wall Street futures gained yesterday after lower oil prices helped to offset fears about surging inflation the Federal Reserve said might require more United States (US) interest rate hikes.

    London and Frankfurt opened higher. Shanghai, Tokyo and Hong Kong advanced. Oil prices edged up after falling below USD100 per barrel this week.

    Investors worry aggressive US and European rate hikes to contain prices rises that are running at a four-decade high might depress global economic activity.

    In early trading, the FTSE 100 in London gained 0.7 per cent to 7,156.84. The DAX in Frankfurt added 1.4 per cent to 12,775.06 and the CAC 40 in Paris advanced 1.3 per cent to 5,989.14.

    On Wall Street, the future for the benchmark S&P 500 index was up 0.2 per cent after notes released on Wednesday from the latest Fed meeting said “an even more restrictive stance could be appropriate” to get inflation back to its two-per-cent target. Fed officials acknowledged that could weaken the economy.

    On Wednesday, the S&P 500 gained 0.4 per cent. The Dow Jones Industrial Average added 0.2 per cent and the Nasdaq composite was 0.3 per cent higher.

    Currency traders at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea. PHOTO: AP

    In Asia, the Shanghai Composite Index rose 0.3 per cent to 3,364.40 and the Nikkei 225 in Tokyo gained 1.5 per cent to 26,490.53. The Hang Seng in Hong Kong closed 0.3 per cent higher at 21,643.58 after spending much of the day in negative territory.

    The Kospi in Seoul climbed 1.8 per cent to 2,334.27 and Sydney’s S&P-ASX 200 was up 0.8 per cent at 6,648.00.

    The Fed raised its key interest rate last month by three-quarters of a point to a range of 1.5 per cent to 1.75 per cent, the biggest single increase in nearly three decades. Chair Jerome Powell suggested at that time a rate hike of one-half or three-quarters of a point, three times the Fed’s usual margin, was likely when policymakers meet later this month.

    Notes released on Wednesday from the Fed’s June 14-15 meeting confirmed other officials agreed that such an increase would “likely be appropriate”.

    Inflation has been boosted by Russia’s attack on Ukraine, which pushed up prices of oil and other commodities, and Chinese anti-virus controls that shut down Shanghai and other industrial centers and disrupted supply chains.

    Oil prices closed below USD100 per barrel on Tuesday for the first time since early May, but US crude is still up more than 30 per cent this year.

    Benchmark US crude gained 40 cents to USD98.94 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 97 cents to USD98.53 a barrel Wednesday.

    Brent crude, the price basis for international trading, rose 37 cents to USD101.06 per barrel in London. It tumbled USD2.08 the previous session to USD100.69.

    The dollar gained to JPY136.12 from Wednesday’s JPY135.98. The euro edged down to USD1.0187 from USD1.0182.

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