Asian stocks rise on optimism for US and Chinese economies

TOKYO — Asian stocks were broadly higher on Wednesday as regional markets looked to strong economic signals from the US and China as growth engines.

Benchmarks rose in morning trading in Japan, China and Australia, but fell slightly in South Korea. Analysts warn that major risks remain, including a surge in COVID-19 cases in some Asian countries, concerns over global inflation and China’s containment policies.

ActivTrade’s Anderson Alves said, “Expectations for economic growth in China and the United States will continue to be key gauges of recession fears. It’s an important headwind.”

Japan’s benchmark Nikkei 225 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 rose 0.5% to 19,932.34 and Shanghai Composite rose 0.2% to 3,284.14.

In New Zealand, the central bank has raised its benchmark interest rate from 2.5% to 3% as it continues to fight inflation. The Reserve Bank of New Zealand said domestic spending remained resilient in the face of domestic and global headwinds and employment was strong. The bank said lower oil prices have eased inflation somewhat, but financial conditions will need to continue tightening until inflation returns to its target range of 1% to 3%.

New Zealand has an inflation rate of 7.3% and an unemployment rate of 3.3%.

In Japan, new cases of COVID-19 have surged in recent weeks as restrictions on economic activity are eased. Ambulances had to circle for hours to find a hospital that could accept the patient. However, domestic travel and shopping appear to be back, boosting consumption.

Wall Street ended a volatile trading day with mostly higher finishes in addition to the market’s recent string of gains.

The S&P 500 rose 0.2%, its third consecutive gain, adding 8.06 points to 4,305.20. The Dow Jones Industrial Average was 34,152.01, up 239.57 points (0.7%). The Nasdaq fell 25.50 points (0.2%) to 13,102.55.

Small business stocks fell slightly. The Russell 2000 fell by less than 0.82 points, or 0.1%, to 2,020.53. Bond yields rose. Yields on 10-year government bonds rose to 2.81% from 2.79% late Monday.

The latest volatility in the market came as traders carefully considered mostly promising financial results from major retailers.

Walmart surged 5.1% after the nation’s largest retailer reported a strong performance that easily beat analyst expectations. Home Depot also jumped 4.1% after reporting better-than-expected results.

Tech, healthcare and energy stocks fell, capping the broader rally. Broadcom fell 1.3%, Moderna fell 5%, the biggest drop in the S&P 500, and Marathon Oil fell 1.1%. Retailers, consumer goods manufacturers and banks posted solid profits.

US stocks hit a one-and-a-half-year high in July and continued to rise through August, partly on hopes that inflation will ease. The latest government report on consumer prices showed that inflation essentially stalled in June and July.

Retailers’ latest results show spending remains strong even as American consumers face the highest inflation in 40 years. Wall Street worries that rising prices for everything from food to clothing could ultimately stifle consumer spending, a key driver of economic growth.

Investors will have a more up-to-date on the retail sector on Wednesday when Target reports its results and the U.S. Department of Commerce releases its retail sales report for July. We expect growth to be just 0.2% from June, when the high was up 1%.

The retailer’s report is the latest in corporate earnings that have been watched closely by investors trying to gauge how inflation will affect businesses and consumers, while trying to gauge how the U.S. Federal Reserve will react. We are closing the round.

Central banks are raising interest rates to slow economic growth and keep inflation in check, but they risk pushing the brakes too hard and pushing the economy into recession.

The Fed raised its benchmark rate for the second time in July by three-quarters of a percentage point. On Wednesday, Wall Street will get more details on the process behind the decision when the Fed releases the minutes of its meeting, which CME’s FedWatch tool says investors expect in his August. Expect a 0.5 point gain at the Fed meeting being held.

In energy trading, benchmark US crude rose 43 cents to $86.96 a barrel. US oil prices fell 3.2% on Tuesday. International benchmark Brent crude rose 31 cents to $92.65 a barrel.

In currency trading, the US dollar fell slightly from 134.22 yen to 134.08 yen. The euro is at $1.0170, almost unchanged from $1.0171.


Contributed by AP Business Writers Damian J. Troise and Alex Veiga. AP writer Nick Perry contributed from Wellington, New Zealand.


Yuri Kageyama’s Twitter is

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