Brent crude fell 13.2% in its biggest daily decline in almost two years
US stocks posted sharp gains overnight as oil prices corrected lower from multi-year tops. The Dow Jones Industrial Average rose 2%, helped by gains in Salesforce, Nike and JPMorgan. The S&P 500 climbed 2.6% for its best day since June 2020. The technology-focused Nasdaq Composite gained 3.6% for its best day since November 2020. Netflix gained 5%, Microsoft added 4.6% and Alphabet rose 5%. Leading the gains, shares of dating service Bumble soared more than 41% after it reported profit and expected growth that was much better than analysts’ expectations.
Tracking Wall Street’s gains, Asian equity markets advanced on Thursday as oil prices dropped, easing fears inflation was set to accelerate. Brent crude fell 13.2% in its biggest daily decline in almost two years. The Nikkei 225 in Tokyo rose nearly 4% and the Shanghai Composite Index gained 1.22%. The Hang Seng in Hong Kong advanced 1.27% while Sydney’s S&P-ASX 200 added 1.1%. However, the current rally could be susceptible to a sharp reversal as geopolitical risks persist. Markets also stay volatile while Russian and Ukrainian diplomats prepare to meet for negotiations in Turkey.
Meanwhile, the USD index corrected lower from May 2020 highs around 99.40 seen at the start of the week. The greenback came under pressure amid profit-taking as risk sentiment has improved ahead of Russia-Ukraine talks. The greenback retreated back to the 98.00 area and turned negative on the weekly charts. Still, the US currency stays within a broader uptrend and could resume the ascent soon due to its safe-haven status.
Elsewhere, international benchmark Brent crude futures rallied to fresh long-term highs around $133 a barrel earlier in the week before profit-taking tool the prices to $105 on Wednesday when the futures lost over 13%. The initial rally was triggered by US President Joe Biden’s ban on Russian energy imports in the latest move to punish Russia over its invasion of Ukraine. Following a sharp sell-off, Brent rebounded partially and was flirting with the $117 a barrel figure on Thursday.
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