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China stocks lead gains as Asia markets mostly rise; oil falls around 2%

SINGAPORE — Shares in the Asia-Pacific region were mixed on Thursday as investors continued to monitor recession concerns.

Hong Kong’s Hang Seng index briefly rose 2% and last traded 1.75% higher, and the Hang Seng Tech index gained 2.59%. Alibaba jumped 6.5% and Xpeng spiked more than 10%.

Mainland Chinese markets struggled for direction initially, but advanced in afternoon trade. The Shanghai Composite was up 1.05%, and the Shenzhen Component was 1.22% higher.

Japan’s stock indexes were slightly higher. The Nikkei 225 was up 0.17%, and the Topix rose fractionally.

Recession or hard landing fears have taken a firmer hold on most markets in the past 24 hours.
Ray Attrill
head of FX strategy, National Australia Bank

South Korea’s Kospi gave up early gains to fall 0.75%, and the Kosdaq declined 3.38%.

In Australia, the S&P/ASX 200 was up 0.42%.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5%.

In economic data, Singapore announced that core inflation was at 3.6% in May compared to a year ago. That’s slightly higher than the 3.5% that analysts polled by Reuters expected and April’s print of 3.3%.

After a bounce on Tuesday, U.S. stocks traded lower overnight.

The Dow Jones Industrial Average declined 47.12 points, or 0.15%, to 30,483.13. The S&P 500 slipped 0.13% to 3,759.89. The Nasdaq Composite was down 0.15% at 11,053.08.

Clifford Bennett, chief economist at ACY Securities, said there have been very strong attempts to buy the bottom, but the market has only been able to trade sideways.

“The daily percentage changes sound big to the upside when they happen, but this is a relativity game, and on that basis the rallies have remained modest to say the least,” he said.

“In the background, the true fundamental outlook continues to deteriorate,” he added.

Fed Chair Jerome Powell on Wednesday told Congress that the central bank is “strongly committed to bringing inflation back down.” Inflation has hit 40-year highs in the U.S.

“It’s not our intended outcome at all, but [a recession is] certainly a possibility, and frankly the events of the last few months around the world have made it more difficult for us to achieve what we want, which is 2% inflation and still a strong labor market,” Powell said, nonetheless adding that he believes the economy is strong for now.

“Recession or hard landing fears have taken a firmer hold on most markets in the past 24 hours,” Ray Attrill, head of FX strategy at National Australia Bank, wrote in a note.

Oil falls more than 1%

Oil futures pared losses but still declined in Asia trade. Brent crude futures, the international benchmark, fell 1.64% to $109.91 per barrel. U.S. crude futures fell 1.88% to $104.19 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 104.118.

The Japanese yen traded at 135.57 per dollar, strengthening slightly after it weakened beyond 136 against the greenback earlier this week. The Australian dollar was at $0.6896 after falling from above $0.702 last week.

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