US stocks have gained overnight, boosted by technology shares, as markets absorb plans by the US central bank to further raise interest rates to curb surging inflation.
On Monday, local time, US Federal Reserve chairman Jerome Powell said that inflation was “much too high” and vowed to take “necessary steps” to tackle price rises.
The Dow Jones index rose 0.6 per cent, to 34,776, the S&P 500 increased 1.2 per cent, to 4,514, and the Nasdaq put on 2 per cent, to 14,118, at 7:05am AEDT.
Apple, Microsoft, Amazon, Meta and Alphabet were among the firms that drove higher the S&P 500 and the Nasdaq.
Shares in sportswear company Nike rose after its quarterly profit and revenue were better than expected.
Tesla gained as it delivered its first German-made cars at its Gruenheide gigafactory, its inaugural European hub.
It said manufacturing issues that previously hampered production because of the pandemic had eased.
In London, the FTSE 100 index rose 0.5 per cent, to 7,477.
Australian shares are set to follow Wall Street higher, with the ASX SPI 200 index up 1.1 per cent, to 7,349, at 7:20am AEDT.
The ASX 200 hit a two-month high yesterday on Mr Powell’s comments.
Meanwhile, the Australian dollar rose nearly 1 per cent, to 74.66 US cents, at 7:10am AEDT.
Bitcoin rose 3.3 per cent, to $US42,518 per digital coin.
War fuels recession fears
Major energy traders warned of gas and diesel shortages in Europe as well as the potential for an economic recession as markets struggle to absorb the potential loss of about two million barrels of oil a day from Russia, one of the world’s biggest energy exporters.
The chief executives of four of the biggest energy traders — Vitol, Gunvor, Mercuria and Trafigura — said the gas market had become dysfunctional because of unmanageable margin calls.
The war in Ukraine has restricted Russian exports and led to the highest petrol prices since 2008.
However, oil prices edged lower overnight, with the European Union looking less likely to ban Russian oil.
At 7:15am AEDT, Brent crude fell 0.2 per cent, to settle at $US115.48 a barrel.
Spot gold lost 0.8 per cent, to $US1920.64 an ounce.
European Union foreign ministers are split on calls for sanctions on Russian oil and gas supplies.
The EU relies on Russia for 40 per cent of its gas.
France’s TotalEnergies is the latest global company to reduce its business ties to Russia, saying that it will not renew its Russian gas oil and crude oil supply contracts for its German refinery.
Russian and Kazakhstan oil exports via the Caspian Pipeline Consortium from the Black Sea may fall by up to 1 million barrels of oil per day, or 1 per cent of global oil production, because of a damaged berth, according to a Russian official.
A storm in Russia’s section of the Black Sea has damaged loading equipment belonging to CPC, one of the world’s biggest oil pipelines that ships crude oil from Kazakhstan to global markets.
Pavel Sorokin, Russia’s Deputy Energy Minister, said maintenance could take up to two months, which could lead to exports falling by 1 million barrels of oil per day.