FILE PHOTO: A man wearing a protective mask walks past an electronic board displaying stock indices of various countries, including the Russian Trading System (RTS) index, which is blank, amid the outbreak of the coronavirus disease (COVID-19). is, in front of a brokerage shop in Tokyo. Japan March 10, 2022. REUTERS/Kim Kyung-Hoon
March 17, 2022
By Kevin Buckland
TOKYO (Reuters) – Japan and Hong Kong led a jump in regional stocks on Thursday, joining Wall Street’s overnight rally amid potential risks from the Federal Reserve’s monetary tightening to a Ukraine war and slowdown became less cloudy in China.
Treasury yields eased somewhat after hitting near a three-year high overnight – with yields on the shorter end rising more sharply to flatten the curve – after the Fed hiked interest rates for the first time since 2018. The Fed hiked rates quarter-point as expected and cabled hikes at every meeting for the remainder of this year to aggressively stamp out inflation.
However, the safe-haven dollar remained on the back foot and oil also stabilized far south of recent multi-year highs amid signs of substantial progress in talks between Russia and Ukraine to end a three-week invasion that Moscow says is a “special military operation”. Demilitarization of the neighbor.
Meanwhile, investors’ concerns about a sharp slowdown for China, which is battling a spreading COVID-19 outbreak with extremely restrictive measures, were allayed on Wednesday after Vice Premier Liu He signaled more stimulus to support markets.
Japan’s Nikkei rose 3.0% to hit a two-week high on Thursday, while South Korea’s Kospi gained 1.6% and Australia’s benchmark 1.4%.
Chinese blue chips were up 2.1% and Hong Kong’s Hang Seng was up 5.2%.
An MSCI index of regional stocks gained 2.5%.
US stock futures pointed to a 0.3% decline in the restart after the S&P 500 rose 2.2% overnight.
Stocks remained strong despite the Fed’s more hawkish stance, as Chairman Jerome Powell “stressed that the economy was strong enough to weather rate hikes and said he was not concerned about the possibility of a recession,” the National economist wrote Australia Bank, Taylor Nugent, in a note to clients.
“Glimmers of progress” on ongoing Russia-Ukraine peace talks have already lifted market sentiment, along with comments from Chinese officials that the response to the current COVID surge is being coordinated with efforts to support economic growth and capital markets, Nugent said.
Australian and Japanese government bond yields rose on Thursday, following a rise in US Treasury yields overnight.
The two-year Treasury yield hit 2.002% after the Fed’s decision before falling to 1.9235% in Tokyo trading, while the 10-year yield jumped to 2.2460% before falling to 2.1545% on Thursday. Both values were the highest since May 2019.
However, the safe-haven greenback had fallen out of favor amid improving market sentiment and while the outcome of the Fed meeting was rather hawkish, analysts saw it as within the bounds of market expectations.
The dollar index, which tracks the currency against six major peers, remained weak, slipping another 0.12% to 98.360 after falling 0.47% on Wednesday.
Crude oil rose on Thursday after the International Energy Agency (IEA) said a drop in oil demand due to higher prices would not offset a Russian oil supply shutdown but was not enough to offset the previous day’s falls.
Brent crude futures were up about 66 cents, or 0.67%, to $98.68 a barrel compared to a recent high of $129.30. US West Texas Intermediate (WTI) crude oil rose 84 cents, or 0.86%, to $95.86 a barrel from a high of $124.58 earlier this month.
(edited by Jane Wardell)
https://www.oann.com/asian-stocks-rally-strongly-as-fed-hike-ukraine-talks-boost-sentiment/?utm_source=rss&utm_medium=rss&utm_campaign=asian-stocks-rally-strongly-as-fed-hike-ukraine-talks-boost-sentiment Asian stocks rebound strongly as Fed hikes rate, Ukraine talks lift sentiment