Asian shares rise on optimism about U.S., China economies

TOKYO

Asian shares rose mainly Wednesday, as investors in the region looked forward to positive economic signs from the U.S. as well as China as drivers for growth.

Morning trading saw benchmarks rise in Japan and Australia. South Korean shares, however, fell slightly. Analysts cautioned that there are still major risks such as rising COVID-19 cases in certain countries in Asia, global inflation concerns, and China’s anti-infective policies.

“Expectations of economic growth in China and the U.S. will likely remain key to gauging recession fears. China’s ‘zero-COVID’ policy is still an important headwind for global growth,” said Anderson Alves, ActivTrades

Japan’s benchmark Nikkei225 rose 0.8% to 29,101.33 in morning trading. Australia’s S&P/ASX 200 rose nearly 0.1% to 7,109.50. South Korea’s Kospi fell 0.5% to 2,521.84. Hong Kong’s Hang Seng increased 0.5%, to 19,932.34, while Shanghai Composite rose 0.2% to 3,284.14.

The central bank of New Zealand raised its benchmark rate to 3%, from 2.5% to 3 % in an effort to combat inflation. The Reserve Bank of New Zealand said In spite of global and local headwinds, domestic spending was resilient and employment was high. Inflation had been somewhat reduced by lower oil prices, according to the bank saidIt had to keep tightening monetary conditions, until inflation returned to the target range of 1%-3%.

New Zealand’s inflation is running at 7.3% and unemployment at 3.3%.

As economic restrictions ease, Japan has seen an increase in COVID-19 cases. Ambulances were forced to travel for hours searching for hospitals willing to accept patients. But domestic travel Shopping and shopping seem to be back, which is boosting consumption.

Wall Street finished a difficult day of trading with a mostly positive finish, adding to recent gains.

The S&P 500 rose 0.2%, its third straight gain, adding 8.06 points to 4,305.20. The Dow gained 239.57 Points, or 0.7%, at 34,152.01. The Nasdaq lost 25.50 point, or 0.2% to 13,102.55.

Stocks in smaller companies edged lower. The Russell 2000 lost 0.82 points or 0.1% to 2,020.53. Bond yields have gained ground. The yield on the 10-year Treasury increased to 2.81% from 2.79 a day late Monday.

Market’s latest gyrations occurred as traders cautiously reviewed mostly positive financial results from major retailers.

Walmart’s stock price rose 5.1%, after the nation’s largest retailer reported strong results which easily outperformed analysts’ predictions. Home Depot saw a 4.1% increase after reporting even better than expected results.

Technology, health care and energy stocks fell, limiting the broader market’s advance. Broadcom fell 1.3%, Moderna slid 5% for the biggest drop in the S&P 500 and Marathon Oil fell 1.1%. Solid gains were made by banks, retailers, and manufacturers of consumer products.

Stocks in the United States had their best month for a year in July. The streak of winning streaks has continued into August partly due to hopes that inflation is decreasing. According to the most recent government report, inflation was basically flat from June through July.

Retailers’ latest data shows that American consumers are still experiencing the highest inflation rate in 40 years, but their spending continues to be solid. Wall Street is concerned that rising prices for everything, from food and clothing to consumer spending could cause a slowdown in the economy’s main engine for growth.

Investors will receive more information on the retail sector Wednesday when Target reports its results, and the U.S. Commerce Department’s July retail sales report. FactSet surveyed economists and they expect modest 0.2% growth over June’s sales increase of 1%.

The latest round of corporate earnings is now complete. These reports have been closely monitored by investors to determine the impact of inflation on businesses and consumers. They also help to predict how the U.S. Federal Reserve might react.

Although the central bank will raise interest rates to slow down economic growth, rein in inflation and curb inflation, it could also risk putting too much pressure on the brakes and leading to a recession.

In July, the Fed raised its benchmark interest rates by three-quarters of an inch for the second consecutive time. Wall Street will be able to get more information on Wednesday when the Fed releases minutes of that meeting. According to CME’s FedWatch tool, investors expect a half point increase at the Fed’s August meeting.

Energy trading saw benchmark U.S. crude oil rise 43 cents to US$86.96 per barrel. U.S. crude oil prices fell 3.2% Tuesday. Brent crude oil, an international standard, rose 31 cents per barrel to $92.65

Currency trading saw the U.S. Dollar fall to 134.08 Japanese Yoen, from 134.22. The euro was $1.0170. This is almost the same as $1.0171.

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AP Business Writers Alex Veiga and Damian J. Troise contributed.