After Four Days of Decline, Growth in Global Stock Markets

In Asian stock markets, share prices rose today, similar to Wall Street the day before, as fears of further strengthening of inflationary pressures and their negative impact on the global economy eased following a sharp drop in oil prices.

The MSCI index of Asia-Pacific stocks, excluding Japan, was up 1.6 percent around 7:00 AM.

Meanwhile, on the Tokyo Stock Exchange, the Nikkei index jumped nearly 4 percent, while share prices in Hong Kong, Australia, Shanghai, and South Korea rose between 0.5 and 1.9 percent.

Asian investors were encouraged by yesterday’s surge in stock indices on Wall Street. The Dow Jones rose by 2 percent, the S&P 500 by more than 2.5, and the Nasdaq index by 3.6 percent.

The rise in indices after four days of decline is attributed to the largest daily drop in oil prices in nearly two years, over 12.5 percent.

This followed a message from the United Arab Emirates (UAE) that it would advocate for increased production in the Organization of the Petroleum Exporting Countries (OPEC) to compensate for supply from Russia, after the U.S. banned the import of Russian oil and other energy sources as part of sanctions against Russia due to its invasion of Ukraine.

– “We support an increase in production and will advocate for OPEC to consider production at higher levels,” stated the UAE embassy in Washington.

This has spurred a rise in share prices, which had been under significant pressure in recent days due to the war in Ukraine and fears that rising oil prices due to supply disruptions from Russia would strengthen already strong inflationary pressures, negatively impacting global economic growth.

Market support is also provided by investors’ hopes that the situation in Ukraine may somewhat stabilize, as the foreign ministers of Russia and Ukraine will meet in Turkey on Thursday.

Previous negotiations have not yielded results, but given that the ministers of the two countries will now talk to each other, it seems there are grounds for continuing negotiations.

– “Comments from Russia and Ukraine somewhat support the hope that a compromise is possible,” says Ray Attrill, a strategist at National Australia Bank.

Oil Prices Recover Losses

After yesterday’s sharp decline, oil prices have recovered some losses this morning.

The price of a barrel of oil on the London market rose by 3.3 percent to $114.80, while on the American market, a barrel increased by 1.9 percent to $110.75.

Dollar Weakens for the Second Day in a Row

In the currency markets, the value of the dollar against a basket of currencies fell for the second consecutive day.

The dollar index, which shows the value of the U.S. dollar against the other six major world currencies, is around 98.12 points this morning, down from 99.07 points at the same time yesterday.

Meanwhile, the exchange rate of the dollar against the Japanese currency rose from yesterday’s 115.80 to 116.10 yen.

However, the U.S. currency weakened against the European currency, with the price of the euro reaching $1.1055, compared to $1.0920 at the same time yesterday.

Thus, the euro exchange rate has further distanced itself from the lowest levels in the last 22 months, which it slipped to earlier in the week due to uncertainty in Europe following Russia’s invasion of Ukraine.