BEIJING — (AP) — Asian stock markets were mixed on Wednesday ahead of a Federal Reserve decision on how to raise interest rates to cool U.S. inflation.
Shanghai and Hong Kong grew. Tokyo and Sydney refused. Oil prices rose slightly.
Wall Street’s benchmark S&P 500 index lost 0.4% on Tuesday.
Traders expect the Fed’s rate hike to be three-quarters of a percentage point, or triple the usual margin. They fear that aggressive action to quell inflation, which is at its highest level in four decades, could tip the world’s largest economy into recession.
A “hawkish surprise” from the Fed could be an “additional shock to risk assets,” ActivTrades’ Anderson Alves said in a report. “Money markets already price around 90% of the possibility of such action.”
The Shanghai Composite Index gained 1.8% to 3,348.58 after Chinese factory activity rebounded in May as virus checks that shuttered businesses in Shanghai and other industrial hubs eased. released.
Hong Kong’s Hang Seng gained 1.6% to 21,396.83 while Tokyo’s Nikkei 225 lost 1.1% to 26,326.16.
The Kospi in Seoul fell 1.8% to 2,447.52 after the government announced South Korea’s unemployment rate rose 0.1 percentage point to 2.8% in May.
Sydney’s S&P-ASX 200 fell 1.3% to 6,599.20.
The Indian Sensex opened less than 0.1% lower at 52,683.77. New Zealand, Indonesia and Bangkok fell while Singapore advanced.
On Wall Street, the S&P 500 fell to 3,735.48, putting it 21.8% below its Jan. 3 peak. This puts it in a bear market, down 20% from the market’s last peak.
The Dow Jones Industrial Average fell 0.5% to 30,364.83 and the Nasdaq composite rose 0.2% to 10,828.35.
Expectations of an unusually large Fed rate hike rose after government data on Friday showed consumer inflation accelerating in May instead of slowing as hoped.
The Fed is scrambling to rein in prices after being criticized earlier for reacting slowly to inflationary pressures.
The British central bank has also raised rates, and the European Central Bank has announced that it will do so next month.
Japan’s central bank kept rates at historic lows. That sent the yen tumbling to its lowest level in two decades around 135 to the dollar as traders shift capital in search of higher yields.
Markets were also rocked by Russia’s attack on Ukraine, which pushed oil prices to all-time highs above $120 a barrel, and virus outbreaks in China that shut down oil prices. factories and disrupted supply chains.
In energy markets, benchmark U.S. crude rose 25 cents to $119.18 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $2 on Tuesday at $118.93. Brent crude, the price basis for international oil trade, added 32 cents to $121.49 a barrel in London. It fell from $1.10 the previous session to $121.17.
The dollar fell to 134.69 yen from 135.30 yen on Tuesday. The euro gained $1.0476 from $1.0411.
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