Global stocks gain as investors monitor situation in Ukraine

TOKYO – Global stocks rose on Tuesday as investors watched the war in Ukraine and inflationary risks, including rising energy costs.

Benchmarks rose in Europe at the start of the session, while they ended higher in Asia. The French CAC 40 gained 0.1% to 6,587.92. The German DAX edged up 0.4% to 14,382.47. Britain’s FTSE 100 rose 0.3% to 7,467.84. The Dow industrials future was 0.3% higher and the S&P 500 future was up 0.2%.

Russia’s war on Ukraine and Western sanctions on Russia are adding to concerns about disruptions to Europe’s energy supply and soaring prices that could hamper progress towards economic recovery from the pandemic.

“With no progress in the peace talks, reports are circulating that the EU is preparing the ground for a Russian oil embargo. Rising energy prices will hurt the EU economy enormously,” said Stephen Innes, managing partner at SPI Asset Management.

In currency trading, the US dollar hit a six-year high against the Japanese yen, breaking above the 120 yen level and trading at 120.42 yen by late afternoon, from 119.47 yen.

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A widening interest rate differential in the United States and Japan, where the central bank’s policy rate is minus 0.1%, is pushing the dollar higher against the yen. This is a boon for export manufacturers, but it increases the costs of Japanese imports of basic necessities, including oil and gas.

The euro traded at $1.0991, down from $1.1016.

Benchmark U.S. crude slid $1.12 to $111.00 a barrel Tuesday in electronic trading on the New York Mercantile Exchange. Brent, the international standard, fell 87 cents to $114.75.

Japan’s benchmark Nikkei 225 added 1.5% to end at 27,224.11. Australia’s S&P/ASX 200 gained 0.9% to 7,341.10. The South Korean Kospi jumped 0.9% to 2,710.00. Hong Kong’s Hang Seng jumped 3.2% to 21,889.28, while the Shanghai Composite recouped earlier losses, gaining 0.2% to 3,259.86.

Hong Kong-traded shares in e-commerce giant Alibaba Group jumped 11.2% after the company increased its share buyback to $25 billion from $15 billion on Tuesday to support a stock price. stock that has fallen by more than half since the ruling Communist Party tightened control. on tech industries by launching regulatory crackdowns.

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Indebted Chinese property developer China Evergrande said on Tuesday it would delay its financial report from last year and its property services business was investigating why more than $2 billion of its deposits had been seized by creditors. . The company’s shares were suspended from trading on Monday.

In remarks to the National Association of Business Economists, US Federal Reserve Chairman Jerome Powell said the Fed would raise its benchmark short-term interest rate by half a point at several meetings of the Fed. Fed, if necessary, to slow inflation. The Fed has not raised its key rate by half a point since May 2000.

The central bank announced a quarter-point rate hike on Wednesday, its first interest rate hike since 2018. Stocks rallied after the announcement and had their best week in more than a year. . The central bank is expected to raise rates several times this year.

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Before Russia’s invasion of Ukraine added another wave of global economic uncertainty to the mix, some Fed officials had said the central bank had better start raising rates by half a dollar. point in March.

Given growing recession risks, Clifford Bennett, chief economist at ACY Securities, said he thinks the Fed should act cautiously.

“Europe is likely to enter recession and with the world experiencing high energy and food prices, the poor will be disproportionately affected. And raising interest rates will have no impact on this wave of war-induced inflation,” he said.

This week, there isn’t much US economic data to give investors a better idea of ​​how companies and investors are handling rising inflation.

The Fed’s decision to raise interest rates had been expected for months as the supply chain

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The war added to fears that inflation could worsen by driving up energy and commodity prices. Oil prices have risen more than 45% this year, and wheat and corn prices have also jumped.

Boeing fell 3.6% on Monday after a 737-800 plane operated by China Eastern Airlines crashed in China with 132 people on board. Reports on Tuesday said there were no survivors. Shares of China Eastern fell 6.2% on Tuesday.

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