Asian stocks buoyed by Wall Street gains as easing oil cools inflation fears

Tuesday, 28 June 2022 00:22 - - {{hitsCtrl.values.hits}}

TOKYO (Reuters): Stocks gained in Asia on Monday amid improved risk sentiment after Wall Street rebounded strongly at the end of last week as oil prices eased, tempering fears of prolonged inflation and the accompanying aggressive Federal Reserve tightening.

Treasury yields remained subdued and the dollar hovered near the lowest in more than a week as investors continued to assess the outlook for US rate hikes and the potential for a recession.

Japan’s Nikkei rallied 1.04%, while Australia’s benchmark jumped 1.69%.

Chinese blue chips rose 0.54% and Hong Kong’s Hang Seng advanced 1.46%. South Korea’s Kospi gained 1.65%. MSCI’s broadest index of Asia-Pacific shares rose 1.31%.

However, US stock futures point to a 0.25% decline when those markets reopen. On Friday, the S&P 500 surged more than 3%, adding to an almost 1% gain on Thursday.

Crude oil fell in volatile trading on Monday as the market grapples with concerns that a global economic slowdown could depress demand versus worries about lost Russian supply amid sanctions over the Ukraine conflict.

Both Brent and US West Texas Intermediate (WTI) futures fell more than a dollar earlier. But, prices have rebounded with Brent at $ 112.78 a barrel, down 34 cents, and WTI at $ 107.17, down 45 cents.

US long-term Treasury yields hovered around 3.13% after bouncing off a two-week low just above 3% at the end of last week as traders removed bets for hikes next year, but still pondered if aggressive tightening this year could trigger a recession.

Yields have dropped from 3.456%, the highest in more than a decade, reached before the mid-month Fed meeting. Then, the central bank hiked rates by 75 basis points, the biggest increase since 1994 and signalled that a similar move is possible in July. The dollar was steady on Monday, continuing to consolidate near the lowest since the middle of the month against major peers.

The dollar index - which measures the currency versus six rivals - was little changed at 104.01, after gradually gravitating over the past few sessions toward the June 17 low of 103.83.

Gold ticked 0.32% higher to $ 1,832.10 per ounce.