Australian equities have continued to recover from last week’s heavy losses as investors dumped their concerns about the risk of a global economic downturn.
It also follows a Wall Street boost driven by energy and megacap growth stocks.
The ASX 200 rose 0.3% to 6,537 points on Wednesday at 10:25 a.m. AEST.
The Australian dollar was slightly weaker at 69.5 US cents.
Bitcoin bounced back to $ 20,550, though it has fallen about 70 percent since its record high in November.
Investors are trying to gauge the extent to which stocks may fall as they weigh the risks to the economy with the US Federal Reserve taking aggressive action to try to curb rising inflation.
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The S&P 500 earlier this month fell more than 20% from its January high, confirming the common definition of a bear market.
Last week, US markets suffered their highest weekly sales since March 2020.
“I think we’ve bottomed out? No, I think we’ll see more volatility,” said Kristina Hooper, Invesco’s chief global market strategist.
“I think the fundraising process will probably take some time.”
Looking for clues about the upcoming rate hike
The S&P 500 gained 2.5 percent to close at 3,765 points. The Nasdaq Composite rose 2.5 percent to 11,068, and the Dow Jones rose 2.2 percent to 30,543.
Oil and gas stocks were among the best, while megacap shares of Apple, Tesla and Microsoft rose sharply to boost the market.
The Fed last week approved its largest interest rate hike since 1994 to curb rising inflation.
Investors are turning to Fed Chairman Jerome Powell’s testimony before the U.S. Senate Banking Committee on Wednesday (local time) for clues to future interest rate hikes and their latest views on the economy.
Investors are “trying to read the tea leaves to see how aggressive the Fed will be,” said Chuck Carlson, executive director of Horizon Investment Services in Hammond, Indiana.
“It’s a difficult question to answer right now because they’ll see what happens to the history of inflation.”
Meanwhile, Goldman Sachs now expects a 30% chance of the US economy falling into recession over the next year, more than its previous 15% forecast.
In the oil markets, Brent crude oil futures rose 0.5% to $ 114.65 a barrel.
Cash gold fell 0.3% to $ 1,832.27 an ounce.
ABC / Reuters
Posted 3 hours ago Tuesday, June 21, 2022 at 9:23 PM, last updated 2 hours, 2 minutes ago, Tuesday, June 22, 2022 at 12:27 AM