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PremiumIndian indices on Thursday bounced back after slipping into the red for a brief while in noon trade, ending the session 0.9% higher. A fall in crude oil prices alleviated inflation concerns as investors scooped up auto stocks after recent declines. European stocks opened lower on Thursday while Asian markets gained after the Federal Reserve chairman said a recession is possible as the US central bank raises interest rates to cool surging inflation. Shares rose in Japan, Australia, Hong Kong, and Shanghai, while it fell in South Korea.
Oil retreated along with other key commodities as concern over a global economic slowdown intensified, with Federal Reserve Chair Jerome Powell warning that a US recession is possible.
West Texas Intermediate sank toward $103 a barrel after closing at a six-week low on Wednesday. The US benchmark has lost more than 15% since the close on June 8 as the drumbeat of warnings over the state of the world’s economy has grown steadily louder, drowning out signs the oil market remains tight.
Powell said while he didn’t see the likelihood of a recession as particularly elevated, it was a possibility. Commodity price hikes were “clearly" connected to the war in Ukraine, he said. Crude’s retreat has been accompanied by deep losses in other raw materials, especially base metals such as copper.
London copper prices dropped to a 16-month low on Thursday, as worried mounted that a rise in Covid-19 cases in key consumer China and aggressive U.S. interest rate hikes would tip the global economy into recession and slow metals demand. Three-month copper on the London Metal Exchange was down 1.7% at $8,628.50 a tonne, as of 0330 GMT, after dropping to its lowest since Feb. 19, 2021 at $8,564.50 earlier in the session. The most-traded July copper contract in Shanghai slipped 2.9% to 66,030 yuan ($9,848.02) a tonne by the midday break, hitting its lowest since late-August.
Sugar stocks have been nosediving for near one month after Government of Indian (GoI) levied excise duty on sugar export. Quality sugar stocks like Dhampur Sugar Mills, Mawana Sugars, Dwarikesh Sugar Industries, Shree Renuka Sugars, EID Parry, etc. have corrected heavily from its respective 52-week high.
The US economy remains strong but a series of aggressive rate hikes meant to cool soaring inflation could eventually trigger a recession, Federal Reserve Chair Jerome Powell cautioned Wednesday.
Powell, whose testimony before senators was closely watched by investors and analysts, also said the world's largest economy faces an "uncertain" global environment and could see further inflation "surprises."
The Fed chair again stressed that policymakers understand the hardships caused by rising prices and are committed to bringing down inflation, which has reached a 40-year high.
Last week, the US central bank announced the sharpest interest rate increase in nearly 30 years and promised additional similar moves to combat the price surge, with gas and food costs skyrocketing and millions of Americans struggling to get by.
An early look at the state of the US job market in June from payroll provider UKG suggests some strengthening, even as the Federal Reserve lifts interest rates sharply and economists raise alarms over the likelihood of a recession.
Workforce activity increased slightly in the first two weeks of the month, according to the firm which tracks shift work in real time. It mostly declined during the prior three months.
Particularly notable, the firm said, was an increase in demand for workers in retail, the first such increase since the start of the year.
That could be good news for Fed Chair Jerome Powell. On Wednesday he told US lawmakers the Fed was committed to bringing down too-high inflation, with a plan to raise borrowing costs high enough that demand for labour, goods and services subsides to levels more in line with supply.
Tokyo shares opened higher as investors gauged inflation and recession risks after US Fed chair Jerome Powell pointed to the need for further rate hikes.
The benchmark Nikkei 225 index rose 0.22 percent or 58.77 points to 26,208.32 while the broader Topix index added 0.41 percent or 7.62 points to 1,860.27.
Gold prices were a touch lower on Thursday, with some support from a weaker dollar and US Treasury yields, after the Federal Reserve's head said the central bank was fully committed to reining in inflation, and would try not to spark a recession in the process. Spot gold was down 0.1% at $1,835.88 per ounce by 0109 GMT. US gold futures also inched 0.1% lower to $1,837.30.
A choppy day of trading on Wall Street ended with a modest pullback for stocks Wednesday, the latest bout of volatility for the market amid concerns about inflation and uncertainty over whether rising interest rates will help or hinder the economy.
The indexes were on pace for a modest gain before slipping into the red in the final minutes of trading. The S&P 500 dropped 0.1%, with the stocks in the benchmark index about evenly split between gainers and decliners. The Dow Jones Industrial Average gave up 0.2% and the Nasdaq fell 0.1%.
Energy companies helped pull the market lower after the price of U.S. crude oil fell 4%. Technology companies also lost ground, which helped keep gains in health care, real estate and other sectors in check.
Investors closely watched testimony to Congress from Federal Reserve Chair Jerome Powell. He reaffirmed the central bank’s determination to raise interest rates and slow inflation.
