Asian stocks extend rally; oil steadies at pre-invasion levels

People walk past a screen displaying the Hang Seng stock index outside Hong Kong Exchanges, in Hong Kong, China July 19, 2022. REUTERS/Lam Yik/File Photo

Asian stocks made broad gains on Thursday, extending an overnight global rally, while oil prices steadied at levels not seen since before Russia’s invasion of Ukraine.

Japan’s Nikkei share average jumped 1.96 percent in early trading. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.33 percent, while Australia’s S&P/ASX 200 gained 0.72 percent.

All three major Wall Street indices made significant gains overnight.

Chinese blue chips were down slightly, however, after the release of worse-than-expected trade data and extension of a lockdown in the city of Chengdu that demonstrated no let-up in the country’s strict zero-COVID policy.

“Today for Asia it’s really a story of whether zero-COVID will continue to impact the Chinese economy, which will of course have a spillover effect in terms of imports,” said Gary Ng, senior economist at Natixis in Hong Kong.

Hong Kong’s Hang Seng index fell 0.59 percent.

Markets are awaiting a speech by Federal Reserve Chairman Jerome Powell later today for signs of any let-up in the central bank’s hawkish approach to tackling inflation.

“I think Powell will signal that the decision for September hasn’t been made yet, but the Fed will remain data dependent,” NatWest Markets analyst Jan Nevruzi wrote in a note.

CME Group’s Fedwatch tool currently shows that expectations for a third successive 75-basis-point interest rate hike are at about 78 percent, up from 69 percent a week ago.

The yen was hovering at around 144 per dollar after weakening almost as far as 145 overnight. The dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up at 109.76.

Oil prices recovered slightly from an overnight plunge but remained below $90 a barrel for the first time since early February. U.S. crude ticked up 0.81 percent to $82.60 a barrel, while Brent crude rose 0.65 to $88.57 per barrel.

Spot gold prices fell 0.1 percent to $1,716.04 an ounce, and leading cryptocurrency bitcoin was last down 0.95 percent at $19,199.00.