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By Gina Lee
Investing.com – Asia Pacific stocks were up on Tuesday morning, taking a breather from the recent market volatility sparked by Russia’s invasion of Ukraine and the ensuing sanctions.
China’s was up 0.25% by 9:29 PM ET (2:29 AM GMT) and the was up 0.24%. Data released earlier in the day showed that the for February was 50.2, while the was 51.6. The was 50.4.
Hong Kong’s inched up 0.07%, with the city potentially imposing a lockdown ahead of a mandatory COVID-19 testing project.
Japan’s jumped 1.52% and in Australia, the rose 1.17%.
Korean markets are closed for a holiday.
Pressure on Russian markets remains firm after the West blocked the Central Bank of the Russian Federation (Bank of Russia)’s access to foreign reserves and removed some Russian banks from the global SWIFT messaging system.
Russian President Vladimir Putin announced countersanctions, and Russia introduced capital controls to minimize the rouble’s fall. The risk that Russian stocks and bonds could be kicked out of major investment benchmarks as they become increasingly hard to trade is also growing.
The sanctions have contributed to market volatility and concerns about inflation, with Russia rich in commodities and the conflict disrupting supplies of raw materials such as grain and energy. This comes as the U.S. Federal Reserve is about to hike interest rates, and lenders worldwide are also making it harder to finance transactions involving Russian resources.
“We could see a longer off-ramp for inflation here” amid the added pressures to energy prices from the invasion, Wells Fargo (NYSE:) Investment Institute head of global asset allocation strategy Tracie McMillion told Bloomberg.
A half-point Fed hike in March 2022 “is probably off the table” she said, predicting four quarter-point increases in 2022.
Atlanta Fed President Raphael Bostic said he is in favor of raising rates by 25 basis points in March and would consider a half-point move if inflation does not start to fall.
“Over the next few weeks, we’ll see a lot of gyrations and a potential for an even bigger dip. But that will be a dip worth buying because most geopolitical crises are resolved relatively quickly,” Regentatlantic Capital LLC co-chief investment officer Andy Kapyrin told Bloomberg.
The will also hand down its policy decision later in the day, with the following a day after. The European Central Bank will also release the on Thursday.
In the U.S., President Joe Biden will deliver the State of the Union address later in the day, while Fed Chairman Jerome Powell will testify before Congress on Wednesday and Thursday. The latest U.S. jobs report, including , is due on Friday.
In cryptocurrencies, bitcoin climbed past the $43,000 mark, as expectations that digital tokens could be increasingly used for payments, thanks to the sanctions against Russia, grow.
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