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Asian benchmarks fluctuate as markets focus on COVID, threats for inflation

In Monday trade, Asian markets were uneven as momentum from Wall Street’s surge last week waned amid conflicting opinions about China’s loosening of coronavirus restrictions and an increase in global interest rates.

Venkateswaran Lavanya of Mizuho Bank remarked, “But it is far too quick to give a definitive conclusion to inflation worries.”

Benchmarks decreased in South Korea and Japan while increasing in China. While warning that there are still variables that might rekindle inflation, such as geopolitical threats, analysts say some investors are encouraged by indicators that inflation in the U.S. is declining earlier than previously predicted.

The key Nikkei 225 index for Japan fell 0.8% in morning session to close at 28,047.58. The S&P/ASX 200 in Australia barely changed, rising less than 0.1% to 7,163.10. The Kospi in South Korea fell 0.2% to 2,479.52. Shanghai Composite increased 0.4% to 3,099.19 while Hong Kong’s Hang Seng increased 2.1% to 17,688.84.

Hopes that inflation pressures had subsided led to a rise on Wall Street as the week came to a conclusion. The Federal Reserve would be less inclined to keep raising interest rates as a result. Analysts, however, claimed that the Wall Street rally was excessive.

“Democrats currently hold the Senate, while Republicans are certain to take over the House. In a moment of economic crisis, policy paralysis is hardly a promising sign for what the next two years may hold. Regarding the outcomes of the U.S. midterm elections, Clifford Bennett, chief economist at ACY Securities, stated that the present stock rise might only have a few days left to go.

For its biggest day in more than two years, the S&P 500 gained 36.56 points, or 5.5%, to reach 3,992.93. Its weekly rise of 5.9% was its largest since June and third in the past four.

The Nasdaq increased 209.18, or 1.9%, to 11.323.33 and the Dow increased 32.49, or 0.1%, to 33,747.86. Both recorded big gains over the week.

China has eased some of its harsh anti-COVID regulations, which have been detrimental to the world’s second-largest economy and are helping the markets. Lessening of limitations could lead to more growth in China, which is undoubtedly positive for Asia. According to a survey released this week, US inflation last month decreased more than was predicted. The Federal Reserve previously increased its benchmark overnight interest rate from almost zero in March to a range of 3.75% to 4%. Continued price increases into next year are still the most expected scenario.

Benchmark U.S. crude increased by 22 cents to $89.18 a barrel in the energy market. U.S. crude increased 2.9% on Friday to reach $88.96 per barrel. The worldwide benchmark, Brent crude, increased by 29 cents to $96.28 a barrel. In currency exchange, the American dollar increased from 138.76 Japanese yen to 139.20 yen. The price of the euro dropped from $1.0356 to $1.0391.

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  • Asian benchmarks fluctuate as markets focus on COVID, threats for inflation
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