Asian stocks mixed after Wall St. Falls; fall in oil prices

Stocks in Asia were mixed on Thursday after a return to Wall Street as crude oil prices rose sharply.

Tokyo and Shanghai were at lower levels while Hong Kong and Sydney were at higher levels. US futures rose and US benchmark crude oil fell back.

After a rally last week, the market has been up and down this week as investors ease concerns about rising inflation and slowing economic growth.

Russia was to reopen its stock market for limited trading on Thursday, nearly a month after shares fell and the exchange was closed after the invasion of Ukraine.

There will be heavy restrictions on trade to prevent heavy selling in anticipation of crushing financial and economic sanctions from Western countries. Foreign shareholders would be unable to sell the shares – an embargo Russia imposed to counter Western sanctions against its financial system and the weakening ruble.

Trading will be allowed in 33 of the 50 companies that are part of the country’s benchmark MOEX index, including air carrier Aeroflot, state-owned gas producer Gazprom and oil company Rosneft, according to a central bank announcement about the reopening.

Investors are looking to see the results of NATO meetings and a European leaders’ summit on Thursday, where President Joe Biden will hold talks with key allies to discuss imposing new sanctions on Russia; and dealing with the extraordinary humanitarian crisis caused by the invasion of Ukraine and working out a consensus on how to respond to Russia launching a cyber, chemical or even nuclear attack.

The attack on Ukraine has already pushed up the prices of energy and other commodities even more.

Stephen Innes of SPI Asset Management said in a commentary, “With the oil re-boiling, pressure points are forming, which has again put pressure on prices.”

Tokyo’s Nikkei 25 was down 0.3% at 27,962,43. In Seoul, the Kospi fell 0.5% to 2,721.64, while the Shanghai Composite Index lost 0.5% to 3,253.31.

The Hang Seng in Hong Kong rose 0.2% to 22,195.96. In Australia, the S&P/ASX 200 gained 0.2% to end at 7,392.70.

The Office of the US Trade Representative on Wednesday reinstated exemptions for tariff hikes imposed during a fight with Beijing over its trade strategy for some Chinese exports. The exemption, which expired earlier, applies to goods including breast pumps, swimming pool vacuum cleaners, electric motors and industrial components.

On Wednesday, the S&P 500 fell 1.2% to 4,456.24, with more than 80% of the benchmark index’s shares closing lower. The Dow slipped 1.3% to settle at 34,358.50. Both the indexes are now on weekly losses.

The Nasdaq fell 1.3% to close at 13,922.60. Shares of smaller companies also declined. The Russell 2000 fell 1.7% to 2,052.21.

Energy stocks rose as crude oil prices climbed more than 5%. Hayes rose 4.6% for the biggest gainer in the S&P 500.

US benchmark crude oil fell by $1.01 to $113.92 a barrel. On Wednesday, it rose by $5.66 to $114.93 a barrel. Internationally, Brent crude fell 68 cents a barrel to $117.07 a barrel. Prices have risen by more than 50% so far in 2022, raising concerns about the impact on a wide range of consumer goods and consumer spending as a whole.

Many of the higher costs incurred by businesses are passed on to consumers and the higher prices of food, clothing and other goods may force them to cut spending, resulting in slower economic growth. Central banks are responding by raising interest rates to counter the effects of inflation.

Bond yields have been rising overall as the market prepares for higher interest rates, but declined on Wednesday. The yield on the 10-year Treasury fell to 2.33% from 2.37% on Tuesday.

As the quarter comes to a close, investors are preparing for the latest round of corporate earnings. Some companies are already providing updates.

Adobe fell 9.3% after giving investors disappointing financial forecasts and warning that halting sales in Russia and Belarus would hit its revenues. Metals maker Worthington Industries slipped 17% after reporting disappointing fiscal third-quarter profits.

In currency trading, the US dollar rose from 121.15 yen to 121.22 Japanese yen late Wednesday. The euro fell from $1.1007 to $1.0986.

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