Asian stocks mixed ahead of Fed rate hike decision
Asian stock markets are mixed ahead of the Federal Reserve’s announcement of how sharply it will raise interest rates to cool U.S. inflation
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Asian stock markets were mixed Wednesday ahead of a Federal Reserve decision on how sharply to raise interest rates to cool U.S. inflation.
Shanghai and Hong Kong advanced. Tokyo and Sydney declined. Oil prices edged higher.
Wall Street's benchmark S&P 500 index lost 0.4% on Tuesday.
Traders expect the Fed rate hike to be three-quarters of a percentage point, or triple the usual margin. They worry aggressive action to cool inflation that is running at a four-decade high might tip the biggest global economy into recession.
A “hawkish surprise” from the Fed could be a “further shock to risk assets," said Anderson Alves of ActivTrades in a report. “Money markets are already pricing around 90% possibility of such action.”
The Shanghai Composite Index gained 1.8% to 3,348.58 after Chinese factory activity rebounded in May as anti-virus controls that shut down businesses in Shanghai and other industrial centers eased.
Hong Kong's Hang Seng gained 1.6% to 21,396.83 while the Nikkei 225 in Tokyo lost 1.1% to 26,326.16.
The Kospi in Seoul shed 1.8% to 2,447.52 after the government reported South Korea's unemployment rate ticked up 0.1 percentage point to 2.8% in May.
Sydney's S&P-ASX 200 sank 1.3% to 6,599.20.
India's Sensex opened down less than 0.1% at 52,683.77. New Zealand, Indonesia and Bangkok declined while Singapore advanced.
On Wall Street, the S&P 500 declined to 3,735.48, putting it 21.8% below its Jan. 3 peak. That puts it in a bear market, or a drop of 20% from the last market top.
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 big Fed rate hike increased after government data Friday showed consumer inflation accelerated in May instead of easing as hoped.
The Fed is scrambling to get prices under control after being criticized earlier for reacting to slowly to inflation pressures.
Britain's central bank also has raised rates, and the European Central Bank says it will do so next month.
Japan's central bank has kept rates near record lows. That has caused the yen to fall to two-decade lows around 135 to the dollar as traders shift capital in search of higher returns.
Markets also have been jolted by Russia's attack on Ukraine, which has pushed oil prices to history-making highs above $120 per barrel, and by virus outbreaks in China that led to the closure of factories and disrupted supply chains.
In energy markets, benchmark U.S. crude rose 25 cents to $119.18 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost $2 on Tuesday to $118.93. Brent crude, the price basis for international oil trading, added 32 cents to $121.49 per barrel in London. It fell $1.10 the previous session to $121.17.
The dollar declined to 134.69 yen from Tuesday's 135.30 yen. The euro gained to $1.0476 from $1.0411.