Enthusiasm was later dampened by news that Russian missiles had targeted Poland.
ASX futures were 50 points or 0.70% higher at 8:00am AEDT on Wednesday, indicating a positive start.
The gains were slashed over the course of the day after a report of Russian missiles crossing into Poland and killing two people damped some of hopes that slowing inflation would result in a pullback in rate hikes by the US Federal Reserve, which kicked off a two-day policy meeting.
Two died in an explosion in eastern Poland, near the border with Ukraine, media reports said.
‘It’s basically a sell-off’
“The drop is stemming from news that a Russian missile landed in Poland,” noted Steve Sosnick, chief strategist at Interactive Brokers, told Reuters. “This could spiral into something much worse but currently markets are the touchy, not the panic,” he added.
Stocks retreated around mid-day, having jumped higher earlier in the session after US producer prices rose less than expected.
In commodities, Brent crude rose 0.45% to $US93.63 a barrel, while gold rose to US$1,778.
Fairfax
In local bond trade, the yield on the 2-year Australian government bond was at 3.18%, and the yield on the 10 year was at 3.75%. Offshore, the 2 Year US Treasury note was yielding 4.37% and the 10 Year US Treasury note was yielding 3.80%.
The Australian dollar was up at 68 US cents. The Wall Street Journal Dollar Index, which monitors the U.S. dollar against 16 other currencies, dropped to 99.05.
Asia
Shares in the Asia-Pacific were mostly higher Tuesday after a meeting between China president Xi Jinping and U.S. President Joe Biden. Hong Kong’s Hang Seng index rose 4.11 percent, to close at 18,343.12, with gains led by a 7.3 percent rally in the Hang Seng Tech index.
Mainland Chinese stocks were also higher on the day, as the Shanghai Composite rose 1.64% to 3,134.08 and the Shenzhen Component up 2.14% to 11,351.33 despite the release of the country’s industrial production and retail sales data that missed expectations.
Tokyo’s Nikkei 225 rose 0.10 percent to close at 27,990.
Europe
Stocks in Europe gained on Tuesday. The pan-European STOXX 600 index rose 0.37%, the French CAC 40 index gained 0.5% and the German DAX climbed 0.46%.
The FTSE 100 index in London was in negative turf, finishing down 0.21 percent on the day. Telecoms giant Vodafone lost 7.96% after the mobile operator slashed its full year earnings guidance and set out plans for an additional €1bn in cost savings by 2026. It cautioned that the global macroeconomic backdrop has deteriorated amid elevated energy prices alongside broader inflation. It has reduced guidance for its core earnings, as well as for its free cash flow.
North America
US stocks opened trading on Tuesday on a strong footing, but then gave up some gains after a report that Russian missiles had crossed into Poland and killed two people, dashing some expectations that cooling inflation would spur a pullback in rate hikes by the US Federal Reserve.
Two people died in an explosion in eastern Poland, close to the Ukrainian border, Polish news media reported.
“The move was precipitated by news that a Russian missile landed in Poland,” Steve Sosnick, chief strategist at Interactive Brokers, told Reuters. “This could escalate into something much worse, but for the time being, markets are jumpy, not freaking out.”
Stocks dipped around midday after having surged earlier in the session following data that suggested US producer prices rose less than expected.
As of the end of trading, the Dow Jones Industrial Average was up 0.15 percent, the S&P 500 0.89 percent, and the Nasdaq Composite 1.48 percent. An inflation report on Tuesday showed that producer prices rose 8 percent in the 12 months through October compared with an 8.3 percent rise that was the estimate.
Walmart was up 7% after the top U.S. retailer raised its annual sales and profit estimates, driven by sustained demand for groceries despite higher prices. Stocks of some other retailers, like Target and Costco also rose after Walmart’s report.
