Asia: Most markets rise as Biden prepares for Middle East trip

ASIAN markets mostly rose on Tuesday (Oct 17) and oil was subdued as Joe Biden prepared for a trip to the Middle East aimed at preventing the Israel-Hamas conflict spilling over into a regional conflagration.

The US president’s trip comes as Israeli Prime Minister Benjamin Netanyahu lines up forces on the Gazan border ahead of an expected ground incursion as Tel Aviv retaliates after deadly Oct 7 attacks by the militants.

Biden will meet Netanyahu on Wednesday, and will also see Jordanian King Abdullah II, Palestinian leader Mahmud Abbas and Egyptian President Abdel Fattah al-Sisi in hopes of finding a way to de-escalate a crisis that threatens the stability of the region.

His visit comes after his Secretary of State Antony Blinken returned for a second time since the attacks, and announced that Israel had agreed to work on civilian aid for Gaza as calls mount to let in vital supplies to avert a humanitarian catastrophe.

The drive to avert a war that could draw in other regional players, including Iran and Lebanon-based Hezbollah, helped push Wall Street higher on Monday, with all three main indexes up around 1 per cent.

Most of Asia took up the baton on Tuesday, with Tokyo, Hong Kong, Sydney, Seoul, Singapore, Taipei and Manila all positive.

And oil prices moved within a narrow band after dropping more than 1 per cent Monday, with the commodity also capped by reports that Washington was easing restrictions on Venezuelan crude.

However, the fluid situation kept investors wary that anything could develop in an instant.

“The price action doesn’t reflect an improvement in investors’ outlook for the Israeli conflict, rather the absence of a significant escalation,” Ian Lyngen, at BMO Capital Markets, said.

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Traders are also keeping an ear on Federal Reserve officials’ comments on the bank’s plans for interest rates, with several lining up to say they are happy to pause as they assess the impact of more than a year of tightening on inflation.

Philadelphia Fed chief Patrick Harker said it would be appropriate to be “resolute, but patient” and that only a sharp change in data would warrant another hike, while his Chicago colleague Austan Goolsbee told the FT that slowing inflation was not a blip.

Data indicating a contraction in New York state factory activity pointed to weaker demand, giving the Fed room to hold off any more increases in borrowing costs.

A planned meeting on Wednesday in Beijing between Chinese President Xi Jinping and his Russian counterpart Vladimir Putin will also be closely followed this week.

Putin is on his first trip to a major global power since invading Ukraine, with Xi hosting representatives of more than 130 countries for a forum on his landmark Belt and Road Initiative. AFP