Beijing, Mar 9:
Asian stocks rebounded on Wednesday after Wall Street declined and Chinese inflation edged higher.
Already high oil prices rose further, adding more than USD 2 per barrel following President Joe Biden’s ban on imports of Russian crude.
Stock benchmarks in Tokyo and Sydney rose while Shanghai and Hong Kong declined. South Korean markets were closed for a presidential election.
Wall Street’s benchmark S&P 500 index sank 0.7 per cent amid enduring unease over the impact of Russian President Vladimir Putin’s attack on Ukraine.
Asian markets “seem to be taking a breather” from their sell-off, but Wall Street’s retreat “may drive some wait-and-see as geopolitical risks show no signs of easing,” Yeap Jun Rong of IG said in a report.
The Shanghai Composite Index lost 0.5 per cent to 3,278.54 after China’s government reported consumer prices rose 0.6 per cent in February from the previous month and producer prices gained 0.5 per cent.
The increase was smaller than in recent months but inflation is likely to surge again given rising global prices for energy and other manufacturing inputs, analysts said.
“Inflation will pick up further in the near-term,” Julian Evans-Pritchard of Capital Economics said in a report. The surge in global commodity prices due to the Ukraine war “will have a much more pronounced impact on the March figures.”
The Hang Seng in Hong Kong slid 1.6 per cent to 20,428.39.
The Nikkei 225 in Tokyo gained 0.7 per cent to 24,973.73.
Sydney’s S&P-ASX 200 climbed 1.1 per cent to 7,054.60. New Zealand, Singapore and Jakarta rose while Bangkok retreated.
Benchmark US crude rose USD 2.41 to USD 126.11 per barrel in electronic trading on the New York Mercantile Exchange. The contract jumped USD 4.30 on Tuesday to USD 123.70.
Brent crude, the basis for international oil prices, gained USD 3.14 to USD 131.12 per barrel in London. It advanced USD 4.77 the previous session to USD 127.98.
Commodities markets have been roiled by Putin’s war because Russia is the No. 2 oil exporter and the No. 3 supplier of nickel, which is used in making electric car batteries, stainless steel and other products. Russia and Ukraine also are among the biggest global sellers of wheat.
Nickel prices doubled Tuesday to more than USD 100,000 per metric ton, prompting the London Metal Exchange to suspend trading.
A major Chinese producer of nickel and stainless steel, Tsingshan Group, faces potential losses of billions of dollars on futures contracts, The Asian Wall Street Journal and Bloomberg News reported. A woman who answered the phone at Tsingshan’s headquarters hung up when told a reporter was calling.
On Wall Street, the S&P 500 fell to 4,170.70 on Tuesday for its fourth straight daily decline. It is now 13.1 per cent below its latest record high.
The Dow Jones Industrial Average lost 0.6 per cent to 32,632.64. The Nasdaq composite retreated 0.3 per cent to 12,795.55. On Monday, it closed 20 per cent below its record high.
On Tuesday, Biden announced the United States would block imports of Russian crude to punish Putin for attacking Ukraine.
Biden said he acted in consultation with European allies but acknowledged they are more dependent on Russian oil and gas and might not be able to make similar moves immediately.
Biden said Tuesday he hopes to limit the pain for Americans, but he acknowledged the ban will push up gasoline prices.
“Defending freedom is going to cost us as well,” he said.
Before Putin’s invasion of Ukraine, financial markets already were uneasy about the global economic outlook as the Federal Reserve and other central banks prepare to try to cool inflation by withdrawing ultra-low interest rates and other stimulus.
In currency markets, the dollar advanced to 115.86 yen from Tuesday’s 115.74 yen. The euro gained to USD 1.0919 from USD 1.0908. (AP)
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