TOKYO (AP) – Asian shares were higher Tuesday as investors eyed the war in Ukraine and inflationary risks including rising energy costs.

Benchmarks rose in Japan, South Korea, Australia and China.

The Russian war on Ukraine and Western sanctions on Russia are adding to worries over disruptions to energy supplies for Europe and surging prices that might hinder progress toward economic recoveries from the pandemic.

“With no progress on peace talks, reports are circulating that the EU is setting the table for a Russian oil embargo. Higher energy prices will hugely harm the EU economy, ”said Stephen Innes, managing partner at SPI Asset Management.

Benchmark US crude added $ 2.89 to $ 115.01 a barrel Tuesday in electronic trading on the New York Mercantile Exchange. Brent, the international standard, surged $ 3.78 to $ 119.40.

Japan’s benchmark Nikkei 225 surged 1.4% is 27,202.05. Australia’s S & P / ASX 200 gained 0.9% to 7.341.10. South Korea’s Kospi edged 0.8% higher to 2,708.63. Hong Kong’s Hang Seng rose 1.8% to 21,606.53, while the Shanghai Composite recouped earlier losses to be up 0.3% at 3,263.83.

Hong Kong-traded shares in e-commerce giant Alibaba Group jumped 8% after the company increased a share buyback to $ 25 billion from $ 15 billion on Tuesday to prop up a stock price that has fallen by more than half since the ruling Communist Party tightened control over tech industries by launching regulatory crackdowns.

Shares ended modestly lower Monday on Wall Street after bouncing around for much of the day and bond yields rose sharply after Federal Reserve Chair Jerome Powell said the central bank was prepared to move more aggressively if need be to contain inflation.

The yield on the 10-year Treasury jumped to 2.30% from 2.14% late Friday.

The S&P 500 fell less than 0.1% to 4,461.18, snapping a four-day winning streak for the benchmark index. The Dow dropped 0.6% to 34,552.99 and the Nasdaq slid 0.4% to 13,838.46.

Smaller company stocks fared worse than the broader market. The Russell 2000 index lost 1% is 2,065.94.

On Wednesday, the central bank announced a quarter-point rate hike, its first interest rate increase since 2018. Stocks rallied after the announcement and went on to have their best week in more than a year. The central bank is expected to raise rates several more times this year.

Before Russia’s invasion of Ukraine added a new wave of global economic uncertainty to the mix, some Fed officials had said the central bank would do better to begin raising rates by a half-point in March.

Given rising risks of a recession, Clifford Bennett, chief economist at ACY Securities, said he believes the Fed should act cautiously.

“Europe will likely enter recession and with the world experiencing ongoing high energy and food prices, the poor will be disproportionately impacted. And raising interest rates will have zero impact on this war-driven inflation wave, ”he said.

This week, there isn’t much US economic data to give investors a better sense of how companies and investors are dealing with rising inflation.

The Fed’s move to raise interest rates had been expected for months as supply chain

Russia’s invasion of Ukraine has added to concerns that inflation could worsen by pushing energy and commodity prices higher. Oil prices are up more than 45% this year and prices for wheat and corn have also surged.

Boeing fell 3.6% after a 737-800 aircraft operated by China Eastern Airlines crashed in China with 132 people on board. Reports Tuesday said there were no survivors. China Eastern’s shares sank 7% on Tuesday.

In currency trading, the US dollar surged to six-year highs against the Japanese yen, hitting 120 yen-levels. It was trading at 120.35 yen by midafternoon, up from 119.47 yen. The euro cost $ 1.0991, down from $ 1.1016.

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