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Asian stocks follow Wall St lower as oil prices rise | Economic news

By ELAINE KURTENBACH, AP Business Writer

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

Tokyo, Hong Kong and Shanghai were down while Sydney rose slightly. US futures rose and benchmark US crude oil was trading near $116 a barrel.

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.

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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.

Tokyo’s Nikkei 25 fell 1.1% to 27,727.76. The Hang Seng in Hong Kong slipped 0.3% to 22,087.39. In Seoul, the Kospi fell 0.8% to 2,714.33, while the Shanghai Composite fell 0.8% to 3,246.19.

In Australia, the S&P/ASX 200 edged up 0.1% to 7,382.60.

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.

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

The Nasdaq fell 1.3% to 13,922.60. Small company stocks also lost ground. The Russell 2000 fell 1.7% to 2,052.21.

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

Benchmark U.S. crude oil 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, 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.

Investors brace for the latest round of corporate earnings as the quarter draws to a close. Some companies are already giving updates.

Adobe fell 9.3% after giving investors a disappointing financial forecast and warning that halting sales in Russia and Belarus would impact its revenue. Metals maker Worthington Industries fell 17% after reporting disappointing third-quarter earnings.

Homebuilders fell sharply after the government announced that sales of new homes in the United States fell 2% in February from a downwardly revised total sales in January. While the number of resale homes on the market remains near record lows, favoring new homes, the decline comes as mortgage rates have risen.

DR Horton slipped 5.1% and Tri Pointe Homes fell 5.9%.

In currency trading, the US dollar rose to 121.25 Japanese yen dollars from 121.15 Japanese yen dollars on Wednesday night. The euro fell to $1.0986 from $1.1007.

AP Business Writers Damian J. Troise and Alex Veiga contributed. Business writer Joe McDonald contributed from Beijing.

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Margarita W. Wilson

The author Margarita W. Wilson