Asian shares track Wall Street higher, oil prices retreat

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Following a Wall Street advance that ended a three-day losing streak, Asian shares were generally higher on Thursday.

Tokyo, Hong Kong and Shanghai both advanced while Seoul edged lower. The oil prices declined and the U.S. futures rose.

Investors seem to have forgotten about new evidence that inflation is still widespread in the U.S. Economy, according to a U.S government report. According to that report, rising energy prices pushed wholesale prices up an unprecedented 11.2% last month compared to one year ago.

The report was issued after news broke that U.S. Consumer Prices remain at their highest levels for generations.

The Federal Reserve and other central banks are being forced to tighten their monetary policy, including raising interest rates to cool the rising demand.

The benchmark interest rate at South Korea’s central banks was raised by 25 percent to 1.50%. It was the fourth increase since August 2021. The Kospi Seoul dropped less than 0.1%, to 2,715.27.

Singapore shares fell after the Singapore Monetary Authority tightened policy and adjusted currency exchange rates aggressively. It also increased its 2022 inflation forecast to 2.5%-3.5%, from 2.0%-3.0%.

On Wednesday, New Zealand’s central banks raised their benchmark interest rate.

Tokyo’s Nikkei 225 index gained 1.2% to 27,167.69 and the S&P/ASX 200 in Sydney climbed 1.6% to 3,238.51.

The Hang Seng in Hong Kong rose 0.8% to 21,549.12, while the Shanghai Composite index climbed 0.7% at 3,207.85. This was after the government indicated that China’s central banking may ease its policy to mitigate the damage to its economy from the effects of pandemic-related closures in major cities like Shanghai or Guangzhou.

U.S. stocks and bonds markets will have a shorter week due to Friday’s Good Friday holiday.

On Wednesday, the S&P 500 index rose 1.1% to 4,446.59, breaking a 3-day losing streak brought on by persistent worries about inflation and the tough medicine the Federal Reserve is planning to use against it.

The Dow Jones Industrial Average increased 1% to 34,564.59 while the Nasdaq gained 2.2% to 13,643.59. The Russell 2000 index jumped 1.9% to 2,025.10, and is currently on track for a weekly gain.

Travel-related companies were the largest gainers. Delta gained 6.2% following strong revenue and solid bookings in its first quarter. The technology stocks gained as well, while the banks fell following JPMorgan’s disappointing earnings report. After revealing a sharp decline in profits due to the Russian-Ukrainian War and higher inflation, it fell 3.2%.

Bond yields fell. From 2.72% late Tuesday, the yield on the 10-year Treasury fell from 2.72% to 2.68% in early Thursday.

Although inflation may be at its peak, it will likely remain high for a while as costs pressures continue to push their way through markets.

Russia’s invasion of Ukraine has raised volatility for energy prices since oil supplies already were tight as demand rises with the waning of the pandemic. U.S. crude oil prices are up roughly 40% for the year, driving up gasoline prices and giving inflation’s a bigger hit on people’s wallets.

“On the geopolitical front, the Ukraine crisis continues to weigh on sentiment, with markets watching for any signs of further deterioration,” Anderson Alves of ActivTrades saidIn a commentary

Many companies in different industries have raised prices to offset rising costs, maintain or increase their margins.

Investors will have more information on how companies and consumers deal with inflation when more companies report their financial results. The earnings of UnitedHealth Group, Wells Fargo, and Citigroup are expected to be reported on Thursday.

Thursday will also see the Commerce Department release its March retail sales report, which will reveal where and how consumers are cutting back on spending.

U.S. benchmark crude oil fell $1.11 to $103.14 a bar in energy trading. The electronic trading on New York Mercantile Exchange showed that the barrel price dropped $1.11 to $103.14 a piece. It rose $3.65 a $104.25 per barrel Wednesday. Brent crude oil, which is the international standard for pricing oil, fell 67 cents per barrel to $108.11

From 125.63 Japanese yen, it fell to 125.43 yen. From $1.0888, the euro rose to $1.0913.