Stocks in Tokyo give up early gains after apparent shooting of former prime minister Abe
BEIJING — Asian stock markets followed Wall Street higher Friday after two Federal Reserve officials said the U.S. economy might avoid a recession and news reports said China might boost construction spending to stimulate its struggling economy.
The Nikkei 225 NIK, 0.54% in Tokyo was last up about 0.5% but gave up early gains following the apparent shooting of former Prime Minister Abe Shinzo, who was reportedly in grave condition.
The Hang Seng HSI, +0.07% in Hong Kong added 0.1% while the Shanghai Composite Index SHCOMP, 0.17% advanced 0.2% after news reports said China might add 1.5 trillion yuan ($220 billion) to spending on public works construction this year to stimulate economic growth.
The Kospi 180721, 0.84% in Seoul rose 0.8% and Sydney’s S&P/ASX 200 XJO, 0.54% was 0.6% higher. Benchmark indexes in New Zealand NZ50GR, 0.30%, Singapore STI, 0.15%, Taiwan Y9999, 0.66% and Indonesia JAKIDX, +0.82% advanced.
Wall Street’s benchmark S&P 500 index rose 1.5% on Thursday after a member of the Fed panel that sets interest rates, James Bullard, said a “soft landing” for the economy still was his “base case.” Another member of the Fed panel, Christopher Waller, said “fears of a recession are overblown.”
“Investor recession fears ebbed,” said Robert Carnell and Iris Pang of ING in a report.
On Wall Street, the S&P 500 SPX, +1.50% rose to 3,902.62 for its fourth daily increase. Roughly three-fourths of the stocks in the index gained.
The Dow Jones Industrial Average DJIA, +1.12% rose 1.1% to 31,384 and the Nasdaq composite COMP, +2.28% advanced 2.3% to 11,621.35.
Investors are uneasy that aggressive U.S. and European interest rate hikes to cool inflation that is running at a four-decade high might derail global economic growth.
Bullard, who is president of the Federal Reserve Bank of St. Louis, said “it would make a lot of sense” to raise the U.S. central bank’s key interest rate by three-quarters of a percentage point, or triple the usual margin, at its meeting this month. That would repeat the dramatic mid-June rate hike, the Fed’s biggest in 28 years.
Waller, speaking at a separate event, said he also supported a 0.75-percentage-point hike. He said the Fed might risk “causing some economic damage,” but with a strong labor market, that shouldn’t be too big.
The U.S. government is due to report June employment data.
On Thursday, official data showed the number of Americans applying for unemployment benefits topped the 230,000 mark for the fifth consecutive week. It was the highest level in almost six months.
Bloomberg News reported China’s Ministry of Finance was considering a plan to allow local governments to raise money from bond sales to spend on building roads and other public works.
It wasn’t clear whether that represented additional spending or was future plans for bond sales brought forward to help shore up economic growth some forecasters say fell close to zero in the quarter ending in June after anti-virus controls shut down Shanghai and other industrial centers.
Markets also have been on edge about Russia’s invasion of Ukraine, which sent oil and other commodity prices soaring.
European markets gained Thursday after British Prime Minister Boris Johnson announced his resignation following a series of departures from his Cabinet by members of his Conservative Party.
In energy markets, benchmark U.S. crude CLQ22, 0.30% lost 11 cents to $102.62 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $4.20 to $102.73 on Thursday. Brent crude BRNU22, 0.75%, the price basis for international trading, shed 12 cents to $104.53 per barrel in London. It gained $3.96 the previous session to $104.65.
The dollar USDJPY, -0.38% declined to 135.80 yen from Thursday’s 136.11 yen.