AP – Global stocks were mostly higher yesterday after a wobbly day on Wall Street as markets cooled off following a rare winning week. Oil prices pushed higher and United States (US) futures also advanced.
As they wrapped up a summit in Elmau, Germany, Group of Seven leaders were finalising a deal to seek a price cap on Russian oil, raise tariffs on Russian goods and impose other new sanctions.
Rising energy prices and Treasury bond yields were weighing on sentiment after last week’s rally, and investors were awaiting remarks expected for midweek by central bank leaders including Federal Reserve Chair Jerome Powell and European Central Bank chief Christine Lagarde, analysts said.
Investors will get an update on US economic growth today when the Commerce Department releases a report on first-quarter gross domestic product (GDP). US consumer confidence data is also on the agenda in a week that has few other major economic releases. So some investors have adopted a “wait and see” stance, said Jun Rong Yeap of IG.
“Investors and traders are worried about the soaring inflation situation and weak economic growth, and these two factors continue to flash red signs on their trading dashboards,” Naeem Aslam of Avatrade.com said in a commentary. “The question that traders are asking is if the bear market rally is over.”
Still, after a mixed start to Asia’s day, shares turned higher.
Germany’s DAX added 0.9 per cent to 13,306.38 while the CAC 40 in Paris advanced 1.4 per cent to 6,132.32. Britain’s FTSE 100 gained 1.1 per cent to 7,337.96. The futures for the Dow industrials and the S&P 500 were up 0.7 per cent.
On Monday, the S&P 500 slipped 0.3 per cent to 3,900.11. The Dow dropped 0.2 per cent to 31,438.26, and the Nasdaq slid 0.7 per cent to 11,524.55.
In Asian trading yesterday, Tokyo’s Nikkei 225 index gained 0.7 per cent to 27,049.47 while the Kospi in Seoul added 0.8 per cent to 2,422.09. Australia’s S&P/ASX 200 climbed 0.9 per cent to 6,763.60.
Chinese shares have gotten a boost from the easing of pandemic restrictions as the country’s latest wave of outbreaks abates. Hong Kong’s Hang Seng index reversed early losses, gaining 0.9 per cent to 22,418.97, and the Shanghai Composite index jumped 0.9 per cent to 3,409.21.
Shares fell in Taiwan and India but rose in Bangkok.
Oil prices extended gains after surging on Monday amid reports that producers in the Middle East were at or near maximum capacity, with little leeway to boost production.
Benchmark US crude oil gained USD1.52 to USD111.09 per barrel in electronic trading on the New York Mercantile Exchange. It jumped USD1.95 to USD109.57 per barrel on Monday.
Brent crude, the basis for pricing for international trading, rose USD1.68 to USD112.66 per barrel.
Stocks closed out last week with solid gains and the S&P 500 posted its best day in two years last Friday. Markets rallied as pressure from rising Treasury yields let up somewhat and investors speculated that the Federal Reserve may not have to be as aggressive about raising interest rates as earlier thought to control inflation.
Treasury yields has resumed their rise. The yield on the 10-year Treasury note, which helps set mortgage rates, rose to 3.22 per cent early yesterday from 3.20 per cent late Monday.
Wall Street will have a few more reports this week that could provide more insight into inflation, economic growth and the Fed’s path ahead.
Russia’s invasion of Ukraine in February has sent energy prices soaring, adding to inflationary pressures following the pandemic. US crude oil prices are up more than 40 per cent for the year. Prices for wheat and corn have also surged.
In other trading, the US dollar rose to JPY135.77 from JPY135.45 late Monday. The euro slipped to USD1.0584 from USD1.0587.