TOKYO –
Asian stocks mostly fell on Wednesday as inflation worries raised expectations the US Federal Reserve could raise interest rates faster than anticipated.
Japan’s Nikkei 225 fell 1.6% to 29,302.66, after the national holiday on Tuesday, as tech stocks were particularly affected by speculation about the Fed’s move. South Korea’s Kospi fell 0.1% to 2,993.80. Australia’s S&P/ASX 200 fell 0.2% to 7,399.40. Hong Kong’s Hang Seng rose 0.6% to 24,788.50, while the Shanghai Composite added 0.2% to 3,594.45.
“Markets continue to shift expectations toward tighter monetary policy by the Fed,” said Yeap Jun Rong, market strategist at IG.
Several Asian central banks have begun raising interest rates to reduce inflation. New Zealand raised its benchmark interest rate by 0.25% on Wednesday to 0.75%.
In October, the Reserve Bank raised it from a record low of 0.25% to 0.5%, the first such increase in more than seven years, removing some of the support it had offered during the Great Depression. The coronavirus outbreak begins.
The Fed will announce it minutes later in the day from its October policy meeting, potentially giving investors more details on the central bank’s plan to begin cutting back on bond purchases. help keep interest rates low.
Investors are watching to see if pressure from rising inflation prompts the Fed to accelerate plans to cut bond purchases and raise benchmark interest rates.
Wall Street ended a volatile trading day, as profits from banks and energy companies offset losses elsewhere in the market. The S&P 500 index rose 0.2 percent to 4,690.70 after swinging between small gains and losses for much of the day.
The Dow Jones Industrial Average rose 0.5% to 35,813.80, while the Nasdaq composite closed 0.5% lower, at 15,775.14. Small-cap stocks also lost ground. The Russell 2000 index fell 0.1% to 2,327.86.
Yields on the 10-year US Treasuries rose to 1.68% from 1.63% late Monday, but fell to 1.65% midday Wednesday in Asia.
U.S. crude oil prices rose 2.3% and wholesale gasoline rose 3.4% on Tuesday after U.S. President Joe Biden ordered the release of 50 million barrels of oil from the nation’s strategic reserves to help reduce costs. energy costs. The move was made in conjunction with other major oil-consuming countries, including Japan.
Although the overall Japanese data does not show an inflation problem on the scale of other countries, critics say it is not as obvious as that, but is clearly present in other sectors. affected by rising energy prices, from fuel-dependent businesses to petroleum-based plastic bags. product.
The release of oil reserves may not necessarily bring down oil prices, but analysts say it could be a message to OPEC.
In energy trading, the price of U.S. benchmark crude rose 41 cents to $78.91 a barrel. Brent crude, the international standard, added 33 cents to $82.64 a barrel.
Stocks are likely to see more mixed trading this week, with US markets closing on Thursday for Thanksgiving and then closing early on Friday.
Wall Street will receive some economic data on Wednesday that could help investors better understand the speed and breadth of the economic recovery. The Labor Department will release its weekly jobless claims report. The Commerce Department releases third-quarter gross domestic product data and new home sales report for October.
In currency trading, the US dollar fell from 115.10 yen to 114.99 Japanese yen. The euro is priced at 1.1241 dollars, down from 1.1254 dollars.
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Associated Press writer Nick Perry is from Wellington, New Zealand.
