Asian markets rose on Thursday after China announced fresh measures to boost its economy, while investors awaited a speech from the Fed chairman that could hint at future rate hikes.
Central bankers are meeting in Jackson Hole, Wyoming, and all eyes are on Federal Reserve Chairman Jerome Powell’s Friday speech for clues about his plans to tame inflation.
Market sentiment was also boosted by the Chinese government’s announcement on Wednesday of new policy measures to support the recovery in the world’s second largest economy.
Asian traders followed a positive lead from Wall Street on Thursday, where the Dow, Nasdaq and S&P 500 all closed higher.
Tokyo, Sydney, Shanghai and Singapore gained in morning trade. Taipei and Seoul also rose.
Hong Kong markets will hold an abbreviated session from 1 p.m. (0500 GMT), the city’s bourse said after Typhoon Ma-On forced a delay.
There are concerns that the Fed’s fight against rising inflation could lead to a recession in the United States, which in turn could hit a global economy still recovering from the Covid-19 pandemic.
“A slower global growth environment is not going away anytime soon, and now we are seeing much broader signs of weakness for the US economy,” OANDA’s Edward Moya said in a statement.
“Powell’s fight against inflation could plunge the US economy into recession by the end of next year, but for now he needs to stick to the restrictive script and leave all options for tightening open.”
– China stimulus –
Central banks around the world are trying to strike a delicate balance between containing inflation and avoiding recessions.
The challenge has been compounded this year by Russia’s invasion of Ukraine, which has sent energy and food prices skyrocketing.
Traders are also eyeing how China will mend the economic damage from its tight Covid controls, a housing crisis and power shortages caused by a record-breaking heatwave.
New measures to support the economy were announced by China’s State Council on Wednesday, including steps to boost lending, consumption and investment, according to the official Xinhua News Agency.
This included support for power generators and agriculture, two sectors particularly hard hit by the heatwave, although Xinhua made no mention of the extreme weather in its State Council meeting statement.
Crude oil traded higher on Thursday as concerns mounted over global supplies after key exporter Saudi Arabia hinted at the possibility of production cuts and talks about reviving the Iran nuclear deal.
– Key figures at 0300 GMT –
Tokyo – Nikkei 225: up 0.6 percent to 28,471.61
Hong Kong – Hang Seng Index: Abridged session starts at 0500 GMT
Shanghai — Composite: up 0.1 percent to 3,218.19
Euro/Dollar: UP at 0.9984 from 0.9967 on Wednesday
Pound/dollar: UP at 1.1817 from 1.1797
Euro/Pound: UP at 84.50p from 84.49p
Dollar/Yen: DOWN at 136.81 yen from 137.06 yen
West Texas Intermediate: up 0.6 percent to $5.45 a barrel
North Sea Brent Crude: up 0.7 percent to $101.93
New York – Dow: UP 0.2 percent at 32,969.23 points (close)
London – FTSE 100: down 0.2 percent at 7,471.51 (close)
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