TOKYO –
Global shares rose Wednesday, buoyed by hopes that a diplomatic solution might avert a Russian invasion of Ukraine.
France’s CAC 40 edged up 0.7% in early trading to 7,030.39. Germany’s DAX rose 0.8% to 15,540.97. Britain’s FTSE 100 gained nearly 0.2% to 7,621.99. The future for the Dow industrials was 0.3% higher at 34,996.00. The S&P 500 future rose 0.3% to 4,475.75.
But analysts warned the tensions were far from completely resolved, and the situation remains volatile.
“In short, provided we get a further pause in geopolitics, we might be able to focus on worrying data instead. But I would tread carefully on the assumption that we will be able to for long,” RaboResearch said in a report.
In Asia, Japan’s benchmark Nikkei 225 jumped 2.2% to finish at 27,460.40. Australia’s S&P/ASX 200 rose 1.1% to 7,284.90. South Korea’s Kospi surged 2.0% to 2,729.68. Hong Kong’s Hang Seng added 1.5% to 24,718.90, while the Shanghai Composite gained 0.6% to 3,465.83.
The Chinese government reported consumer prices rose 0.9% over a year earlier in January while prices of goods as they left the factory rose 9.1%.
China has been hit by the same supply disruptions that are pushing prices up in the United States and Europe, but the impact on Chinese consumers has been smaller. January inflation was down from December’s 1.5%. Forecasters expect it to decline further.
Russia announced that some units participating in military exercises around Ukraine would begin returning to their bases. Later in the day, Russian President Vladimir Putin said Moscow is ready for talks with the United States and NATO on military transparency and other security issues. Still, President Joe Biden said Tuesday that the U.S. had not yet verified Russia’s claim of a troop drawdown.
Investors have been preparing for the U.S. Federal Reserve to start raising interest rates to fight inflation. The central bank is expected to start raising rates in March and traders see a 61% chance for a first hike of half a percentage point, double the traditional move.
Rising costs have been crimping operations for a wide range of businesses and prompting many to raise prices on finished goods from clothing to food. That has raised concerns that consumers could eventually pull back on spending, therefore hurting economic growth. Investors will get an update on retail sales on Wednesday when the Commerce Department releases its January report.
Investors also have their eye on the latest round of corporate earnings, including DoorDash on Wednesday and Walmart on Thursday.
In energy trading, U.S. benchmark crude surged US$1.09 to $93.16 a barrel in electronic trading on the New York Mercantile Exchange. It slumped 3.6% Tuesday. Brent crude, the international standard, added $1.20 to $94.48 a barrel.
Oil prices have been volatile amid tensions over Russia potentially invading neighbouring Ukraine. Russia is a major energy producer and military action that disrupts supplies could jolt markets and global industries.
In currency trading, the U.S. dollar rose to 115.75 Japanese yen from 115.63 yen. The euro cost $1.1387, up from $1.1362.
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AP Business Writer Joe McDonald in Beijing contributed.
