BEIJING (AP) – Asian stock markets were mixed yesterday after Wall Street fell on worries the Federal Reserve will raise interest rates as soon as March.
Shanghai and Hong Kong advanced. Seoul and Sydney declined. Japanese markets were closed for a holiday.
Investors were rattled last week after notes from the latest Fed meeting showed officials thought the United States (US) job market is healthy enough that it might no longer need ultra-low interest rates and other stimulus.
That was reinforced by US employment numbers on Friday that showed stronger-than-expected wages, though with only about half as much hiring as forecast.
The prospect of earlier rate hikes “suggests that markets could continue to be roiled by volatility”, Tan Boon Heng of Mizuho Bank said in a report.
The Shanghai Composite Index gained 0.2 per cent to 3,587.03 and the Hang Seng in Hong Kong advanced 0.7 per cent to 23,658.91.
The Kospi in Seoul fell one per cent to 2,926.72 and Sydney’s S&P ASX 200 lost 0.1 per cent to 7,447.10.
India’s Sensex added 0.5 per cent to 60,046.96. Bangkok was flat, New Zealand declined and Singapore and Jakarta advanced.
Investors were cautious after Fed officials said in December that plans to roll back ultra-low rates and other economic stimulus that has boosted share prices might be accelerated to cool US inflation now at a four-decade high. On Friday, Wall Street’s benchmark S&P 500 index fell 0.4 per cent to 4,677.03, or about 2.5 per cent below January 3’s record high.
The Dow Jones Industrial Average slipped less than 0.1 per cent to 36,231.66. The Nasdaq composite fell one per cent to 14,935.90.
Investors are pricing a better than 79 per cent probability that the Fed will raise short-term rates in March. A month ago, they saw less than 39 per cent of a chance of that, according to CME Group.
Record-low interest rates have helped to boost stock prices despite bouts of unease about the coronavirus pandemic.
The Fed already has slowed bond purchases that were pumping money into the financial system to push down commercial lending rates. Notes from its December meeting indicated Fed officials might to cut off such purchases more quickly than previously planned.
In energy markets, benchmark US crude rose nine cents to USD78.99 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 56 cents on Friday to USD78.90. Brent crude, used to price international oils, added nine cents to USD81.84 per barrel in London. It lost 24 cents the previous session to USD81.75.
The dollar gained to JPY115.81 from Friday’s JPY115.56. The euro declined to USD1.1329 from USD1.1362.
