Asian Shares See Cautious Gains Amid Rate Hike Worries

Asian stocks logged cautious gains on Wednesday despite growing worries that aggressive central bank policy tightening will dent global growth.

The World Bank on Tuesday slashed its forecast for global growth in 2022 further, saying the war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth.

“For many countries, recession will be hard to avoid,” said World Bank President David Malpass.

The European Central Bank meets on Thursday, with economists expecting that the central bank will lay the groundwork for rapid rate rises.

U.S. Treasury Secretary Janet Yellen told senators at a Senate Finance Committee hearing on Tuesday that inflation is likely to stay high and the Biden administration would likely increase the 4.7 percent inflation forecast for this year in its budget proposal.

The Fed is expected to raise its benchmark funds rate by 50 basis points next week and again in July.

Chinese stocks swung between gains and losses before ending notably higher for the day on the back of a rally in tech shares.

The benchmark Shanghai Composite index rose 0.68 percent to 3,263.79 while Hong Kong’s Hang Seng index surged as much as 2.24 percent to close at 22,014.59. Bilibili soared 19.6 percent after China’s gaming regulator granted publishing licenses for 60 games.

Japanese shares rose to end at a 2-1/2-month high after U.S. markets rallied to end higher for a second straight day overnight.

The Nikkei average climbed 1.04 percent to 28,234.29 after data showed the country’s Q1 GDP fell less than initially estimated. The broader Topix index closed 1.18 percent higher at 1,969.98.

Oil explorers led the surge on firmer oil prices. Japan Petroleum soared 5.7 percent and Inpex Corp added 4.7 percent.

SoftBank Group, Fanuc and Daikin Industries climbed 2-4 percent while Dai-ichi Life Holdings declined 2.2 percent and Mizuho Financial Group gave up 1.5 percent.

Seoul stocks closed little changed with a negative bias after Q! GDP growth was revised slightly down to 0.6 percent.

Australian markets eked out modest gains as strong commodity prices lifted mining and energy stocks. Banks fell after raising their home loan variable interest rates.

The benchmark S&P/ASX 200 rose 0.36 percent to 7,121.10 while the broader All Ordinaries index ended up 0.39 percent at 7,347.

Atlas Arteria jumped 16.2 percent after reports that IFM Investors is considering a non-binding takeover bid for the toll road operator.

New Zealand shares ended little changed, with the benchmark NZX-50 index finishing marginally higher at 11,266.24.

U.S. stocks shrugged off a weak start to settle higher overnight, setting aside a weak margin guidance from Target and the World Bank’s sharp cut to its global growth outlook for the year.

The Dow climbed 0.8 percent, the S&P 500 rallied 1 percent and the tech-heavy Nasdaq Composite advanced 0.9 percent.

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