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Asian shares rise on optimism about US, China economies

TOKYO — Asian shares were mostly higher Wednesday as regional markets looked to strong economic signs out from the U.S. and China as drivers of growth.

Benchmarks rose in morning trading in Japan, China and Australia, although shares dipped slightly in South Korea. Analysts warned major risks remain, such as for example surging cases of COVID-19 in a few countries in Asia, worries about global inflation and China’s policies to curb infections.

Expectations of economic growth in China and the U.S. will probably remain key to gauging recession fears. Chinas zero-COVID policy continues to be a significant headwind for global growth, said Anderson Alves at ActivTrades.

Japan’s benchmark Nikkei 225 added 0.8% in morning trading to 29,101.33. Australia’s S&P/ASX 200 rose nearly 0.1% to 7,109.50. South Korea’s Kospi lost 0.5% to 2,521.84. Hong Kong’s Hang Seng added 0.5% to 19,932.34, as the Shanghai Composite edged up 0.2% to 3,284.14.

In New Zealand, the central bank raised its benchmark interest from 2.5% to 3% since it continues attempting to battle inflation. The Reserve Bank of New Zealand said domestic spending had remained resilient when confronted with local and global headwinds, and employment was robust. Lower oil prices had given some reprieve from inflation, the lender said, nonetheless it had a need to continue tightening monetary conditions until inflation was cut back to its target selection of 1% to 3%.

New Zealands inflation is running at 7.3% and unemployment at 3.3%.

In Japan, new cases of COVID-19 have already been surging in recent weeks, as restrictions on economic activities ease. Ambulances experienced to circle all night searching for hospitals that may accept patients. But domestic travel and shopping seem to be back, boosting consumption.

Wall Street ended a choppy day of trading with a mostly higher finish, increasing the market’s recent string of gains.

The S&P 500 rose 0.2%, its third straight gain, adding 8.06 points to 4,305.20. The Dow gained 239.57 points, or 0.7%, to 34,152.01. The Nasdaq fell 25.50 points, or 0.2%, to 13,102.55.

Smaller company stocks edged lower. The Russell 2000 slipped 0.82 points, or significantly less than 0.1%, to 2,020.53. Bond yields gained ground. The yield on the 10-year Treasury rose to 2.81% from 2.79% late Monday.

The market’s latest gyrations came as traders cautiously reviewed mostly encouraging financial results from major retailers.

Walmart jumped 5.1% and following the nation’s largest retailer reported strong results that easily topped analysts’ forecasts. Home Depot rose 4.1% after also reporting better-than-expected results.

Technology, healthcare and energy stocks fell, limiting the broader markets advance. Broadcom fell 1.3%, Moderna slid 5% for the largest drop in the S&P 500 and Marathon Oil fell 1.1%. Retailers, consumer product makers and banks made solid gains.

U.S. stocks had their finest month in per year . 5 in July and the winning streak has been continuing into August, partially on hopes that inflation is easing. The most recent government report on consumer prices showed that inflation essentially stalled from June to July.

The most recent results from retailers show that spending remains solid, even while American consumers face the hottest inflation in 40 years. Wall Street has been concerned that higher prices on from food to clothing could eventually stunt the economy’s main engine of growth, consumer spending.

Investors are certain to get more updates on the retail sector Wednesday, when Target reports its results and the U.S. Commerce Department releases its July retail sales report. Economists surveyed by FactSet expect modest 0.2% growth from June, when sales rose 1%.

The retail reports are capping off the most recent round of corporate earnings, which were closely watched by investors attempting to determine inflation’s effect on businesses and consumers, while attempting to gauge the way the U.S. Federal Reserve will react.

The central bank is raising interest levels in order to decelerate economic growth and rein in inflation, though it risks hitting the brakes too much and veering the economy right into a recession.

The Fed in July raised its benchmark interest by three-quarters of a spot for a second-straight time. On Wednesday, Wall Street are certain to get additional information on the procedure behind that decision once the Fed releases minutes from that meeting. Investors expect a half-point increase at the Fed’s upcoming meeting in August, in accordance with CME’s FedWatch tool.

In energy trading, benchmark U.S. crude rose 43 cents to $86.96 a barrel. U.S. crude oil prices fell 3.2% Tuesday. Brent crude, the international standard, gained 31 cents to $92.65 a barrel.

In forex trading, the U.S. dollar edged right down to 134.08 Japanese yen from 134.22 yen. The euro cost $1.0170, virtually unchanged from $1.0171.

AP Business Writers Damian J. Troise and Alex Veiga contributed. AP writer Nick Perry contributed from Wellington, New Zealand.

Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama

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