Asian stocks follow Wall St up as Powell says rates will rise – Orange County Register

By JOE McDONALD

BEIJING (AP) – Asian stock markets followed Wall Street higher on Wednesday after Federal Reserve Chairman Jerome Powell said monetary policy would return to normal and interest rates could be raised earlier than planned.

Shanghai, Tokyo, Hong Kong and Sydney advanced. Oil prices rose higher.

Wall Street’s benchmark S&P 500 index rose 0.9% after Powell said policy “in all likelihood” will return to normal as bond buying and other stimulus measures ease. Speaking before the Senate Banking Committee, he said ultra-low interest rates could be raised sooner than planned if necessary to cool inflation, which is at a four-decade high.

“Wall Street now has a better understanding of how the Fed will normalize policy,” Oanda’s Edward Moya said in a note. “Following Powell’s testimony, some investors felt they received a clear signal to buy.”

The Shanghai Composite Index rose 0.2 percent to 3,574.61 and the Nikkei 225 in Tokyo gained 1.9 percent to 28,748.21. The Hang Seng Index in Hong Kong rose 1.9% to 24,193.22.

Kospi in Seoul rose 1.4% to 2,969.16 and Sydney’s S&P-ASX 200 was 0.6% higher at 7,438.20. New Zealand retreated while Southeast Asian markets rallied.

Investors were confused in mid-December when Fed officials said they would speed up plans to ease the stimulus measures that were boosting stock prices. They are trying to figure out how the world’s largest economy and financial markets will react.

On Tuesday, the S&P 500 broke a five-day losing streak and rallied to 4,713.07. The Dow Jones Industrial Average rose 0.5% to 36,252.02. The Nasdaq composite rose 1.4% to 15,153.45.

Apple rose 1.7% and chip maker Nvidia 1.5%. Media stocks and a mix of retailers and other companies that rely on direct consumer spending rose. Facebook’s parent Meta platform is up 1.9% and Gap is up 3%.

The World Bank cut its forecast for global economic growth this year to 4.1% from 4.3% in part because supply chain disruptions have fueled inflation. The agency estimates the world economy will grow 5.5% in 2021.

On Wednesday, the US government will report consumer inflation. Next is the wholesale price index on Thursday.

In the energy market, the price of U.S. benchmark crude rose 29 cents to $81.51 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.99 ​​on Tuesday to $81.22. Brent crude, which is used as the price base for international grades, was 19 cents higher at $83.91 a barrel in London. It rallied $2.85 in the previous session to $83.72.

The dollar fell to 115.33 yen from Tuesday’s 115.37 yen. The euro rose to $1.1375 from $1.1366.