Crude hits 7-year high on recovery hope but equity rally runs out

Jan 18, 2022: Crude oil hit a more than seven-year high Tuesday on optimism the global recovery will ramp up demand, but concerns about the end of long-running central bank support and rising Treasury yields saw most equity markets reverse early gains.

After an almost uninterrupted rally from the early days of the pandemic, world markets are showing signs of levelling out as global finance chiefs shift from economy-boosting largesse to measures aimed at reining in inflation.

Still, there is an expectation that equities will enjoy further gains this year as countries reopen and people grow more confident about travel, especially as studies suggest the more prevalent Omicron coronavirus variant appears to be milder and as vaccines are rolled out.

Analysts are also watching the corporate earnings season that is under way, with hopes that firms can match their stellar performances last year.

But while Asian markets started the day brightly after Monday's travails, traders returned to selling, with US Treasury yields surging on expectations the Federal Reserve will have to unveil several interest rate hikes to tackle a worrying spike in inflation. Wall Street was closed Monday.

Tokyo, Hong Kong, Sydney, Seoul, Singapore, Taipei, Mumbai, Bangkok and Jakarta all fell.

AFP/APP

Posted on: 2022-01-18T14:56:19+05:00

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