Oil prices extended their rally Tuesday on supply worries as European leaders debated banning imports from Russia, though equities stood their ground despite a tepid Wall Street lead and the prospect of a sharper hike in US interest rates.
The surge in oil prices has been a key driver of turmoil on world markets in recent weeks as demand surges owing to economic reopenings just as supplies are strained. That, along with a spike in the cost of other key commodities such as metals and wheat caused by the war, has sent inflation rocketing and caused a headache for central banks already trying to wind down pandemic-era monetary policy.
Still, while Wall Street ended on a negative, equities remained resilient in Asia.Hong Kong was back on the rise after last week's blockbuster surge as Chinese authorities reiterated a pledge to support markets and the stuttering economy. China's property firms have struggled in the wake of Beijing's drive to curb excessive debt in the real estate sector, as well as rampant consumer speculation.
Focus remains on Russia's invasion of Ukraine and its impact on the global economy as surging commodity prices ramp up expectations of inflation across the world. "The entire global economy will feel the effects of the crisis through slower growth, trade disruptions, and steeper inflation," read a joint statement from institutions including the European Bank for Reconstruction and Development.Warning that the world could face the"biggest oil supply shock in decades", the International Energy Agency called on governments to urgently implement measures to cut global crude consumption within months.
But while the extreme volatility that has characterised markets since Russia's invasion three weeks ago has died down for now, commentators remain cautious.The uncertainty over Ukraine, and reports that some lockdown measures in Chinese tech hub Shenzhen - which helped fuel a markets selloff earlier this week - were being eased early, has helped push oil prices back up above $100 per barrel.
"Market sentiment was also buoyed by signs of progress in peace talks between Russia and Ukraine and pledges of more economic stimulus in China," said Bianca Botes, director Citadel Global. "For markets at least, peak concern over Ukraine appears to be behind, and the focus has shifted to the central banks," said Shinichiro Kadota, senior FX strategist at Barclays in Tokyo.
Stocks and U.S. equity futures slipped Friday as a rally in Chinese technology shares fizzled and oil jumped further above $100 a barrel amid mixed signals from the peace talks between Russia and Ukraine. The war has severely disrupted Russian crude flows. The Pentagon warned Russian President Vladimir Putin may threaten to use nuclear weapons if the conflict drags on.
“Volatility is likely to stay elevated for quite some time” even as sentiment gauges “have been a screaming buy in some respects for quite some time.” Meanwhile, S&P Global Ratings cut Russia’s credit score, saying its debt is “highly vulnerable to nonpayment.” Meanwhile, investors were also evaluating Xi’s pledge to reduce the economic impact of his Covid-fighting measures.
The disposal is aligned with Altron's shift to focus on its core ICT businesses. The strategy was adopted under the leadership of outgoing CEO, Mteto Nyati, who leaves the position at the end of June after a five-year term. “Although consumer sentiment remains downbeat across all three income groups, affluent consumers are now considerably more pessimistic about the outlook for the economy and their household finances compared to low-income households,” the bank said.
“Discretionary spending will come under strain as the prices of necessities such as food and fuel scale new record highs and interest rates continue to edge up, calling for downward revisions to real consumer spending projections for 2022,” said Matikinca-Ngwenya. Its energy storage business delivered an 18% increase in revenue to R7.6 billion, thanks to strong export demand.On Thursday morning, its share price jumped by almost 6% to R27.77.
Asia-Pacific equities rose nearly 3% as the tech gains propelled Hong Kong and yen weakness spurred export-reliant Japan. S&P 500 and Nasdaq 100 futures fluctuated after the broad U.S. market’s best two-day advance since 2020. The dollar was steady and the yen hovered near a six-year low. Oil snapped a three-day drop but remains down more than 10% for the week.
The Fed said it would begin allowing its $8.9 trillion balance sheet to shrink at a “coming meeting,” without elaborating.“It’s possible we’re going to see a yield curve inversion,” Meera Pandit, global market strategist at JPMorgan Asset Management, said on Bloomberg Television. Ahead of the decision, Hong Kong's main equities index closed up more than nine percent after China's official Xinhua news agency said authorities would maintain capital market stability and adopt measures to handle risks for troubled property developers.
The main positive contributors were food, beverages and tobacco products, as well as textiles, clothing, footwear and leather goods. “The immediate impact of these cost increases was exacerbated, as there is a timing lag between the increases and their recovery through selling price increases,” said Libstar.16 March 10:42
The shortage led to an increase in backlogs in sales orders both in Logicalis and Westcon international divisions, compared to the 2021 financial year. Chief Executive Neil Murphy said the last year had seen Bytes"continuing to strengthen its market position in cloud, security and annuity software and services.
The eye-watering rally followed a report by the official Xinhua news agency that China will keep the stock market stable and support overseas share listing, citing a meeting chaired by Vice Premier Liu He. The report follows a series of articles by state media in recent days seeking to talk up sentiment.
“Personally I fear that the crisis the market faces is not just about China, it’s a global issue, and not just something that regulators can solve with this,” said Wang Mingxuan, fund manager at Quant Technology Investment. “The calm this bring is just the calm before the storm.” Oil’s descent slowed after Russian President Vladimir Putin cast doubt on the success of negotiations between Russia and Ukraine.
“The crude price plunge appears to be over now that Russian President Putin ended whatever positive momentum was building towards a ceasefire,” said Ed Moya, senior market analyst at Oanda. The key cartel members have been resisting pressure from the US, Japan and European nations to accelerate production increases.
While buyers continue to shun Russian crude, there are signs that exports might not be completely cut off as some deals retreat from the public eye. Surgutneftegas PJSC is offering financing flexibility to some customers in order to keep crude flowing, while India is working out a mechanism to facilitate trade using local currencies. Still, the value of Russia’s Urals crude keeps moving lower.