Asian stocks mixed after Fed confirms rate hike plan
Asian stock markets were mixed on Thursday after notes from the latest US Federal Reserve meeting confirmed expectations of more rate hikes but did not surprise investors.
Benchmarks in Hong Kong and Sydney fell while Tokyo, Shanghai and Seoul were higher. Oil prices also increased.
Investors are worried about the impact of interest rate hikes in the United States and other Western economies to cool rising inflation. Wednesday’s Fed statement showed board members favor a 0.5 percentage point increase in their next two meetings. That will affect economic activity but is already factored into share prices.
ActivTrades’ Anderson Alves said in a report there were no “hawkish or dovish surprises” or mention of a larger increase.
The Shanghai Composite Index rose 0.4% to 3,111.17 and the Nikkei 225 in Tokyo gained less than 0.1% to 26,689.00. The Hang Seng Index in Hong Kong fell 0.6% to 20,053.50.
Kospi in Seoul rose 0.5% to 2,630.34 while Sydney’s S&P-ASX 200 fell 0.4% to 7,126.20. New Zealand and Singapore rose while Bangkok retreated.
On Wall Street, the benchmark S&P 500 index rose 0.9 percent to 3,978.73. The Dow Jones Industrial Average rose 0.6 percent to 32,120.28. The Nasdaq composite rose 1.5% to 11,344.74.
Minutes from the Fed’s meeting this month showed most panel members agreeing that a half-point increase to the Fed’s benchmark short-term rate “probably would be appropriate.” That would be twice the usual gain margin.
Investors are also worried about the impact of Russia’s February invasion of Ukraine and the unexpected Chinese economic slowdown.
They hope the Fed will be able to cool inflation that is at a four-decade high without sending the world’s largest economy into recession.
The Fed raised its key interest rate by 0.5 percentage points at its meeting in May, in its most positive move in two decades. It indicates that there will be more bull runs.
The S&P 500 is exiting a seven-week losing streak near the end of a bull market for stocks that began in March 2020.
In the energy market, the price of U.S. benchmark crude rose 58 cents to $110.91 a barrel in electronic trading on the New York Mercantile Exchange. It rose 56 cents in the previous session to $110.33. Brent crude, the base price for international oils, rose 44 cents to $111.56 a barrel in London. It rose 47 cents in the previous session to $114.13 a barrel.
The dollar rose to 127.36 yen from 127.32 yen. The euro rose to $1.0698 from $1.0688.