Asian stocks rise as traders turn to ECB meeting
Asian equities rose on Thursday as traders turned their attention to the European Central Bank’s (ECB) monetary policy decision later in the day.
The MSCI Asia Pacific ex-Japan Index rose 0.4% in early trade, with gains led by Australia and South Korea. The Hang Seng Index in Hong Kong was up 0.2%, while the Shanghai Composite Index was flat.
The ECB is widely expected to raise interest rates by 10 basis points on Thursday, its first hike in more than a decade. However, some analysts believe the ECB may surprise markets with a larger hike, given the recent surge in inflation.
“The ECB is facing a difficult balancing act,” said analysts at ING Bank. “On the one hand, it needs to raise rates to bring inflation under control. On the other hand, it doesn’t want to derail the economic recovery.”
The ECB’s decision will be closely watched by investors, as it will provide an indication of the central bank’s commitment to fighting inflation.
In other news, oil prices rose to a seven-year high on Thursday, supported by supply concerns and the prospect of a prolonged conflict in Ukraine. Brent crude futures rose 1.5% to $92.32 a barrel.
Meanwhile, the Australian dollar rose to a two-week high against the US dollar, supported by strong economic data. The Aussie was up 0.4% to $0.6440.
Key takeaways:
- Asian equities rose in early trade, with the MSCI Asia Pacific ex-Japan Index up 0.4%.
- The ECB is widely expected to raise interest rates by 10 basis points on Thursday, its first hike in more than a decade.
- Oil prices rose to a seven-year high on Thursday, supported by supply concerns and the prospect of a prolonged conflict in Ukraine.
- The Australian dollar rose to a two-week high against the US dollar, supported by strong economic data.
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