Asian Stocks Up as Some Recession Fears Ease
2022.07.08 08:10
By Zhang Mengying
Investing.com – Asia Pacific stocks were up on Friday morning, following a U.S. rally sparked by hopes that policymakers can tackle inflation without causing a recession.
Japan’s Nikkei 225 gained 1.37% by 8:45 PM ET (1:45 AM GMT).
South Korea’s KOSPI jumped 1.24%.
In Australia, the ASX 200 rose 0.74%.
Hong Kong’s Hang Seng Index was up 0.86%.
China’s Shanghai Composite was up 0.31% while the Shenzhen Component edged up 0.12%.
U.S. Federal Reserve governors Christopher Waller and St. Louis Fed President James Bullard supported the need for restrictive policy to bring down soaring prices but suggested that the U.S. can still avert a recession.
China could deliver a 1.5 trillion yuan ($220 billion) stimulus to boost growth, adding to market expectations of an economic recovery.
Boosting market sentiment, U.S. President Joe Biden is due to discuss possible U.S. tariffs on Chinese goods in a meeting with advisers later in the day.
The market is assessing the possibility of a soft landing.
“I’m calling this period right now a recession obsession,” BMO Capital Markets Corp. chief investment strategist Brian Belski told Bloomberg.
“Institutional investors are not positioned for any kind of upside move. That’s why you are seeing these sharp moves on a day like today and certainly over the last few days in terms of a short squeeze. We remain positive and think people are way too negative.”
Investors now await the U.S. jobs report, due later in the day, for further clues about the Fed’s policy path.
Elsewhere, Boris Johnson announced his intention to resign as British prime minister, easing the political chaos in the UK.
