Asian stocks rebound after Wall Street falls on Ukraine tensions

Agencies | Beijing

The Daily Tribune – www.newsofbahrain.com

Asian stock markets rebounded Wednesday after Wall Street slid on anxiety over President Vladimir Putin’s authorization to send Russian soldiers into eastern Ukraine.

Shanghai, Hong Kong, South Korea and Australia advanced. Oil prices edged higher on concern about possible disruption to Russian supplies. Japanese markets were closed for a holiday, AP reports.

Global stock prices sank Tuesday as traders tried to figure out the impact of Russia’s moves and sanctions imposed by Washington, Britain and the 27-nation European Union on its banks, officials and business leaders.

“Current US sanctions on Russia are less-than-feared by the market,” said Anderson Alves of ActivTrades in a report. Alves noted American officials have more “acute options” including reducing Russia’s access to the SWIFT system for global bank transactions.

Wall Street’s benchmark S&P 500 index lost 1% on Tuesday. That puts it 10.3% below its Jan. 3 all-time high and into a correction, or a decline of at least 10% but less than 20%.

On Wednesday, the Shanghai Composite Index rose 0.6% to 3,476.15 and the Hang Seng in Hong Kong gained 0.7% to 23,682.90.

The Kospi in Seoul advanced 0.5% to 2,720.20 and Sydney’s S&P-ASX 200 added 0.5% to 7,196.40.

New Zealand rose after the central bank raised its benchmark interest rate by one-quarter point to 1% to cool inflation. The Reserve Bank of New Zealand said its benchmark rate would be raised to more than 3% by next year.

India’s Sensex opened up 0.2% at 57,425.96. Indonesia gained while Singapore and Bangkok declined.

On Wall Street, the S&P 500 fell to 4,304.76. The Dow Jones Industrial Average lost 1.4% to 33,596.61. The Nasdaq composite lost 1.2% to 13,381.52.

US stocks were already off their early Jan. 3 peak due to uncertainty about the impact of the Federal Reserve’s decision to withdraw ultra-low interest rates and other economic stimuli.

Markets were rattled after Putin recognized the independence of rebel-held areas in Ukraine and sent in troops in defiance of US and European pressure.

Wheat prices rose on concern about supplies from Russia and Ukraine being disrupted.

Prices of nickel and aluminium, for which Russia is a major supplier, also rose.

European gas prices jumped after Germany withdrew a key document needed for certification of the Nord Stream 2 gas pipeline from Russia.

In energy markets, benchmark US crude rose 28 cents to $92.19 in electronic trading on the New York Mercantile Exchange. The contract rose $1.28 on Tuesday to $92.35. Brent crude, the price basis for international oils, advanced 22 cents to $94.07 per barrel in London. It gained $1.45 the previous session to $96.84.

The dollar edged down to 115.05 yen from Tuesday’s 115.07 yen. The euro declined to $1.1327 from $1.1334.