By Gina Lee
Investing.com – Asia Pacific stocks were up on Thursday morning and were in tune with a rebound in global shares. Risk sentiment improved, with dip-buyers increasing bets that weeks of market volatility could have priced in the economic impact of the conflict in Ukraine.
Japan’s Nikkei 225 jumped 3.71% by 9:42 PM ET (2:42 AM GMT).
South Korea’s KOSPI rose 2.15%, with markets re-opening after Yoon Suk-yeol was elected as the country’s next president. Yoon is expected to take a hawkish stance in relations with China and North Korea.
In Australia, the ASX 200 rose 1.51% and Hong Kong’s Hang Seng Index rose 2.12%.
China’s Shanghai Composite was up 1.76% and the Shenzhen Component rose 2.09%.
In the U.S., contracts opened little changed after the S&P 500 recorded the sharpest gains since June 2020. Amazon.com Inc. (NASDAQ:AMZN) shares soared more than 10% in late trading after the company announced a share split and $10 billion buyback plan. The online retailer is now a key step closer to being included in the Dow Jones Industrial Average.
Meanwhile, a rally in many commodity markets stalled, although oil clawed back some of its steep losses overnight that saw it drop below the $110 mark. Investors also digested the United Arab Emirates (UAE)’s call for the Organization of the Petroleum Exporting Countries and allies (OPEC+) alliance to speed up oil production. This would be a dramatic change from the cartel’s strategy so far and could pit the UAE against its fellow members.
The market volatility that has been in place since Russia’s invasion of Ukraine on Feb. 24. led to warnings of potential stagflation. Uncertainty remains, but investor sentiment picked up Wednesday after Ihor Zhovkva, Ukrainian President Volodymyr Zelenskyy’s deputy chief of staff, indicated Ukraine is open to discussing Russia’s demand for neutrality, but with security guarantees.
“If you see a resolution of the war in Ukraine, and we are getting some reports that Russia and Ukraine might be moving closer to the negotiation stage, that could help shift sentiment,” UBS Global Wealth Management senior U.S. equity strategist Nadia Lovell told Bloomberg.
However, “we expect the market to remain choppy near term,” she said, as both the conflict and Western sanctions against Russia continue. Lovell added that she is looking for the S&P 500 to recover to 4,800 by the end of 2022 assuming no significant escalation in geopolitical stress, “given the fact that the U.S. economy’s entering this from a position of strength.”
The Russian rouble fell as trading in the currency resumed, with the impact of the sanctions remaining strong. Investors also await the European Central Bank’s latest policy decision and the U.S. consumer price index, both due later in the day.
An imminent overhaul of cryptocurrencies oversight in the U.S. is expected to provide regulatory clarity for investors. This sparked a sharp rally in digital tokens, with Bitcoin near the $42,000 mark.