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    Global stocks rise as Europe wrestles with gas shortages

    BEIJING (AP) – Global stock markets and Wall Street futures rose yesterday as Liz Truss became British prime minister and Europe wrestled with uncertainty about Russian gas supplies.

    London and Frankfurt opened higher. Shanghai and Tokyo gained. Benchmark United States (US) crude rose more than USD2 per barrel. The euro edged higher against the dollar.

    European markets were jolted by last Friday’s announcement that the suspension of Russian gas supplies through the Nord Stream 1 pipeline would be extended indefinitely. Shortages have pushed up prices and weigh on economic growth.

    Truss “will have to hit the ground running as the United Kingdom (UK) prepares for a brutal winter”, Craig Erlam of Oanda said in a report. Noting news reports that Truss plans to freeze energy bills, Erlam said “the question is what impact it will have on inflation and gas demand”.

    In early trading, the FTSE 100 in London rose 0.3 per cent to 7,307.22 and Frankfurt’s DAX advanced 0.4 per cent to 12,816.01. The CAC 40 in France gained 0.2 per cent to 6,103.77.

    On Wall Street, futures for the S&P 500 index and the Dow Jones Industrial Average were up 0.5 per cent as US markets prepared to re-open after a three-day holiday weekend.

    On Friday, the S&P and the Dow both lost 1.1 per cent after government data showed US hiring slowed in August but wages rose. Forecasters said the Federal Reserve might see that as evidence more rate hikes are needed to cool inflation that is at a multi-decade high.

    A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul. PHOTO: AP

    Investors worry repeated rate hikes by the Fed and central banks in Asia and Europe to control surging inflation might derail global economic growth. Central banks said they must slow business and consumer activity to get prices under control.

    In Asia, the Shanghai Composite Index rose 1.4 per cent to 3,243.44 after the government promised on Monday to accelerate easier lending and other policies to shore up economic growth that sank to 2.5 per cent over a year earlier in the first half of 2022, less than half the official annual target.

    The announcement might “provide a short-term uplift” to sentiment, but investors “ultimately want to see a stronger recovery”, said Yeap Jun Rong of IG.

    The Nikkei 225 in Tokyo edged up less than 0.1 per cent to 27,626.51 while the Hang Seng in Hong Kong shed less than 0.1 per cent to 19,215.45.

    Sydney’s S&P-ASX 200 lost 0.4 per cent to 6,826.50 after Australia’s central bank raised its benchmark lending rate by 0.5 percentage points to 2.35 per cent, its highest level since 2015.

    The Kospi in Seoul advanced 0.3 per cent to 2,410.02 while India’s Sensex added less than 0.1 per cent to 59,291.91. New Zealand retreated while Southeast Asian markets gained.

    In China, the deputy director of the Cabinet’s planning agency said on Monday it will “speed up the release of policy effectiveness” to “make up for losses caused by the epidemic in the second quarter”, according to news reports.

    Also on Monday, Beijing freed up more foreign currency holdings of Chinese commercial banks for lending and trading by lowering the amount they must hold in reserve.

    In energy markets, benchmark US crude gained USD2.04 to USD88.91 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, lost 42 cents to USD95.32 per barrel in London.

    The dollar advanced to JPY141.73 from Monday’s JPY140.46 yen. The euro gained to 99.57 cents from 99.31 cents.

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