BEIJING (AP) – Asian stock markets were mixed on Wednesday after a cooler reading on US inflation buoyed hopes the US Federal Reserve (Fed) will postpone a possible interest rate hike.
Shanghai, Tokyo and Sydney rose while Hong Kong and Seoul declined.
Wall Street’s benchmark S&P 500 index gained 0.7 per cent to a 14-month high after government data on Tuesday showed US consumer inflation eased to four per cent over a year earlier in May from the previous month’s 4.9 per cent. It was less than half last June’s peak of 9.1 per cent but still double the Fed’s two per cent target.
That reinforced hopes the Fed will avoid announcing another rate hike when its monthly meeting ends Wednesday. Two Fed board members have said the US central bank should put off another hike while it studies the impact of previous increases.
“The Fed will see this as a window of opportunity to pause,” Clifford Bennett of ACY Securities said in a report.
The Shanghai Composite Index rose 0.2 per cent to 3,241.57 and the Nikkei 225 in Tokyo advanced 1.5 per cent to 33,495.29. The Hang Seng in Hong Kong lost less than 0.1 per cent to 19,511.86.
The Kospi in South Korea was off 0.7 per cent at 2,619.68 and Sydney’s S&P-ASX 200 gained 0.3 per cent to 7,159.90.
India’s Sensex opened down 0.1 per cent at 63,071.69. New Zealand declined while Singapore and Bangkok advanced.
On Wall Street, the S&P 500 rose 30.08 points on Tuesday to 4,369.01. The Dow Jones Industrial Average gained 0.4 per cent to 34,212.12 and the Nasdaq composite rallied 0.8 per cent to 13,573.32.
Traders hope the US economy can avoid a recession even after the Fed raised its benchmark lending rate to a 16-year high to extinguish surging inflation by cooling business activity.
Tuesday’s inflation reading prompted traders to increase bets for the Fed to announce no change to interest rates. That would be the first monthly meeting in more than a year without a rate hike.
Previous rate hikes led to a contraction in manufacturing and three high-profile bank failures.
Nvidia gained 3.9 per cent and was the strongest force pushing up the S&P 500, along with other technology stocks. Tech and other high-growth stocks are seen as some of the biggest beneficiaries if the Fed eases off rate hikes.
Nvidia has gotten an added boost from Wall Street’s enthusiasm for artificial intelligence.
On Tuesday, four out of five stocks in the S&P 500 rose.
Raw-material producers and industrial companies had some of the biggest gains amid hopes for a resilient economy. Miner Freeport-McMoRan rose 5.3 per cent.
Many traders expect the Fed to resume raising rates in July even if it holds steady this week.
Zions Bancorp fell 1.6 per cent after it appeared to cut its forecast for upcoming net interest income in an investor presentation.
Many investors came into this year predicting a recession would hit in the third quarter, which is two weeks away. Yet a resilient job market has propped up economic activity.
In energy markets, benchmark US crude rose seven cents to USD69.49 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose USD2.30 on Tuesday to USD69.42. Brent crude, the price basis for international oil trading, added 16 cents to USD74.45 per barrel in London. It gained USD2.45 the previous session to USD74.29.
The dollar declined to 140.12 yen from Tuesday’s 140.29 yen. The euro was unchanged at USD1.0790.
