Global Stocks Mixed After Fed Chair Backs Smaller Rate Hike

By The Associated Press
The Associated Press
The Associated Press
March 3, 2022 Updated: March 3, 2022

BEIJING—Global stock markets were mixed Thursday and oil prices jumped another $5 as Russian forces whose attack on Ukraine has roiled financial markets bombarded the country’s second-largest city and besieged two ports.

The economic fallout from the Russian invasion expanded, with Fitch Ratings and Moody’s Ratings cutting Russia’s credit rating. They said the invasion and Western sanctions have hurt Moscow’s ability to repay debts and raised risks for the economy and stability.

In early trading, the FTSE 100 in London lost 0.6 percent to 7,385.44 and Frankfurt’s DAX shed 1.1 percent to 13,849.55. The CAC in Paris slipped 0.5 percent to 6,467.16.

On Wall Street, the future for the S&P 500 was 0.2 percent lower and the contract for the Dow Jones Industrial Average lost 0.1 percent.

The London Stock Exchange said it had suspended trading in shares of 27 companies with links to Russia, including some of the biggest in energy and steel, such as Lukoil, Gazprom, Sberbank, Rosneft, and Magnitogorsk Iron & Steel Works.

In a notice, the exchange said the suspensions reflected recent financial sanctions and were made “in light of market conditions and in order to maintain orderly markets.”

Shares in those companies plunged with the start of Russia’s invasion last week.

Global stock benchmark provider MSCI said it was removing Russian stocks from indexes widely tracked by fund managers, describing the Russian equity market as “uninvestable.”

Trading on the Moscow exchange remained closed Thursday apart from a limited variety of trades rubles and in derivatives and commodities.

In currency markets, Russia’s ruble lost another 15 percent against the U.S. dollar and worth less than 1 cent. It has plunged since Western governments imposed sanctions that cut off much of Russia’s access to the global financial system.

In Asian trading, the Nikkei 225 in Tokyo rose 0.7 percent to 26,577.27 and the Hang Seng in Hong Kong gained 0.6 percent to 22,467.34. The Shanghai Composite Index lost less than 0.1 percent to 3,481.11.

Epoch Times Photo
A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, on March 3, 2022. (Ahn Young-joon/AP Photo)

The Kospi in Seoul added 1.6 percent to 2,747.08 and Sydney’s S&P-ASX 200 was 0.5 percent higher at 7,151.40.

India’s Sensex shed 0.3 percent to 55,311.33. New Zealand and Southeast Asian markets also advanced.

Wall Street’s benchmark S&P 500 index rose Wednesday after Chair Jerome Powell said the Fed is set to raise its key interest rate. He said he supports a traditional hike of 0.25 percentage points instead of the bigger rise recommended by some policymakers.

Powell said the impact on the U.S. economy of Russia’s attack is “highly uncertain.”

“Markets have reacted positively to the remarks, which is a debatable interpretation of Powell’s nuanced comments,” ING economists said in a report. “Volatility is the key here, and uncertainty. This isn’t going to go away any time soon.”

Share prices have swung widely as investors try to figure out how the Russian attack will affect supplies of oil, wheat, and other commodities and the global recovery from the coronavirus pandemic.

Traders already were uneasy about plans by the Fed and other central banks to fight inflation by withdrawing ultra-low interest rates that boosted stock markets.

In energy markets, benchmark U.S. crude rose $3.25 to $113.85 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oils, added $3.15 to $116.08 per barrel in London.

Both gains were smaller than Wednesday’s surge of more than $7 per barrel but still unusually wide margins for a daily change.

Leaders of OPEC and other major oil exporters decided Wednesday to stick to plans to gradually increase production. The coalition, made up of OPEC members led by Saudi Arabia and non-cartel members led by Russia, chose to increase production by 400,000 barrels per day in April.

The United States and other major oil consumers in the International Energy Agency agreed this week to release 60 million barrels from strategic reserves to boost supplies. But that has had little impact on market prices.

The dollar gained to 115.73 yen from Wednesday’s 115.58 yen. The euro declined to $1.1087 from $1.1126.

By Joe McDonald