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Asia markets higher, oil consolidating after drop

Australian currency

The S&P/ASX 200 closed 1.1% higher after rising more than 1.5% to an intraday high of 7161 on Thursday, after Wall Street gained as oil prices dropped more than 10%. Asia markets are higher across the board, Japan’s Topix up as much as 4% and the Nikkei 225 about 4% higher. NZX 50 closed 1.2% higher.

Market sentiment was boosted after Ihor Zhovka, the chief of staff to Ukraine President Volodymyr Zelensky, told Bloomberg that the country was ready for a diplomatic solution, providing there was an immediate ceasefire and withdrawal of Russian troops.

US futures are dipping into the red ahead of inflation data due Thursday that is expected to nudge 8%, up on the previous month. The House passed a US$1.5 trillion spending bill that includes US$14 billion emergency aid for Ukraine and funds the US federal government for the rest of the fiscal year.

The Dow Jones Industrial Average closed 2% higher, up 653 points, at 33,286.25, while the S&P 500 was up 2.6% for its best day since June 2020, and the tech-heavy Nasdaq was up 3.6%.

Amazon announced a 20-for-1 stock split after market close and said it planned to buy back up to US$10 billion worth of shares.

Europe’s major stock indices were higher, the Euro Stoxx 50 up 7% and the FTSE 100 rising 3.3%. Germany’s DAX was up almost 8%.

Crude oil lost more than 10% overnight. By the end of the ASX session, Brent was trading around US$116.28 a barrel compared with US$140 on Monday and WTI down to US$111.44 from around US$131 a barrel.

Spot gold has come off from above US$2000 an ounce to trade around US$1979.44 an ounce by the ASX close.

Bitcoin had dropped below US$40,000 by late afternoon AEDT at US$39,560.

The Australian dollar is holding above US73c, slightly stronger on Thursday afternoon AEDT around US73.25c against the US dollar, having hit a 4-month high of US74.41c on Monday. AUD is likely to see weakness into the FOMC meeting next week, where the US Federal Reserve is expected to start raising interest rates by at least 25 basis points. There’s support just above US72c and a solid drive higher could test the October 2021 highs at US75.55c.

READ MORE: How currencies affect stock markets

Reserve Bank deputy governor Guy Debelle announced his resignation from Australia’s central bank on Thursday ahead of joining Fortescue Future Industries (FFI) as its chief financial officer.

In a statement issued by the RBA, Dr Debelle said he would leave the bank on March 16 ahead of joining Fortescue in June. He will also lead a new Sydney office being established by FFI.

A number of ASX-listed companies, including Worley and Rio Tinto, said on Thursday they are pulling out of doing business in Russia. Sony and Nintendo have said they are taking their stores offline in Russia, calling for peace in Ukraine.

Rio Tinto traded ex-dividend on Thursday, down more than 2% by the close.

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