Asia stocks surge on thin optimism
Europe opens lower after oil prices rise; Futures for Wall Street’s S&P 500 index and Dow Jones Industrial Average trading lower
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Beijing: Asian markets surged while Europe opened lower Thursday after oil prices recovered some of a decline the day before that had eased inflation fears.
Futures for Wall Street's benchmark S&P 500 index and the Dow Jones Industrial Average were down 0.4per cent as Russian attacks on Ukraine intensified two weeks as fighting entered its third week. Markets rallied Wednesday after oil plunged, but economists warned that was due to changes in futures contracts and other factors, not war developments.
European stocks had rallied Wednesday even more than the US market, with Germany's DAX jumping 7.9per cent and France's CAC 40 soaring 7.1per cent.
In Asia, the Nikkei 225 in Tokyo rose 3.9per cent Thursday to 25,690.40 and the Shanghai Composite Index added 1.2per cent to 3,296.09. The Hang Seng in Hong Kong advanced 1.3per cent to 20,890.26. The Kospi in Seoul jumped 2.2per cent to 2,680.32 as trading resumed after a day off for South Korea's presidential election. South Korea's president-elect Yoon Suk Yeol said Thursday that he plans to strengthen the country's alliance with the United States, fortify the military and sternly handle North Korean provocations, hours after he won the country's hard-fought election to become its next leader. Sydney's S&P-ASX 200 added 1.1per cent to 7,.130.80. New Zealand and Southeast Asian markets also advanced.
On Thursday, prices rebounded by nearly $6 per barrel in London and nearly $4 in New York. Forecasters warned markets will stay volatile, as the Russian and Ukrainian foreign ministers were meeting in Turkey for negotiations.
"Markets seem to have latched onto a couple of slightly less dismal clues as an excuse to rally hard," said ING economists in a report. "The basis for that optimism — it's actually pretty thin."
In early trading, the FTSE 100 in London lost 0.6per cent to 7,146.60 and Frankfurt's DAX slipped 1.9per cent to 13,592.84. The CAC 40 tumbled 2per cent to 6,261.35. The retreat came as the European Union statistics agency reported that inflation in the 19 countries that use the euro rose by an annual 5.8per cent in February, a record high for the fourth month in a row. European economies import more Russian oil and gas and face a bigger potential shock from the war. That might prompt European governments to use more economic stimulus, which pushes up stock prices.
Benchmark U.S. crude rose $2.33 to $111.03 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $15 to $108.70 on Wednesday. Brent crude, used as the international price basis, advanced $3.33 to $114.47 per barrel in London. It lost $16.84 the previous session to $111.14. On Wednesday, the S&P 500 rose 2.6per cent on Wednesday for its biggest daily gain in 12 years as prices swing wildly. The Dow added 2per cent and the Nasdaq composite gained 3.6per cent. The war has wide implications for world markets and economies. Russia is the No. 2 global oil exporter after Saudi Arabia and the No. 3 supplier of nickel used in making electric car batteries and stainless steel. Russia and Ukraine are big wheat exporters.
