Asian markets follow Wall Street lower as oil prices rise

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Stocks fell Thursday in Asia after a retreat on Wall Street as crude oil prices rose sharply.

Nikkei 250 NIK from Tokyo,
-0.83%
lost 1.1% and the Hang Seng HSI index,
+0.13%
in Hong Kong slipped 0.1%. In Seoul, the Kospi 180721,
-0.61%
fell 0.6%, while the Shanghai Composite SHCOMP index,
-0.54%
lost 0.6%.

In Australia, the S&P/ASX 200 XJO,
+0.13%
decreased by 0.1%. Shares fell in Taiwan Y9999,
-0.33%,
but won in Singapore STI,
+0.88%,
Malaysia FBMKLCI,
-0.09%
and Indonesia JAKIDX,
+0.52%.

The U.S. Trade Representative’s office on Wednesday reinstated exemptions for some Chinese exports from tariff hikes imposed during a fight with Beijing over its trade tactics. The exemptions, which expired earlier, apply to products such as breast pumps, pool vacuums, electric motors and industrial components.

After a rally last week, markets have been up and down this week as investors weigh concerns about rising inflation and slowing economic growth.

Investors are waiting to see the results of NATO meetings and a summit of European leaders on Thursday, where President Joe Biden will meet with key allies to discuss imposing new punitive sanctions on Russia; and dealing with the extraordinary humanitarian crisis caused by its invasion of Ukraine and working towards a consensus on how to react if Russia were to launch a cyber, chemical or even nuclear attack.

The attack on Ukraine pushed already rising prices for energy and other commodities even higher.

“Pressure points are building up with oil boiling again, leading to stagflation weighing on sentiment again,” Stephen Innes of SPI Asset Management said in a commentary.

On Wednesday, the S&P 500 SPX,
-1.23%
fell 1.2% to 4,456.24, with more than 80% of stocks in the benchmark closing lower. The Dow DJIA,
-1.29%
slipped 1.3% to 34,358.50. Both indices are now on pace for a weekly loss.

The Nasdaq COMP,
-1.32%
fell 1.3% to 13,922.60.

US benchmark crude oil CLK22,
-0.94%
added 88 cents to $115.81 a barrel. It rose $5.66 to settle at $114.93 a barrel on Wednesday. A barrel of Brent crude BRNK22,
-0.58%,
the international standard, advanced $1.28 to $119.08 a barrel. Prices have so far risen more than 50% in 2022, raising concerns about the impact on a wide range of consumer goods and on consumer spending in general.

Many of the higher costs incurred by businesses have been passed on to consumers, and rising prices for food, clothing and other goods could cause them to cut back on spending, leading to slower economic growth. Central banks responded by raising interest rates to try to counter the impact of inflation.

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

In currency trading, the US dollar USDJPY,
+0.07%
rose to $121.25 Japanese yen from $121.15 yen on Wednesday night.


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