Asian stocks lower after Fed confirms rate hike plans

Asian stock markets were mostly lower Thursday after notes from the Federal Reserve's latest meeting confirmed expectations of more interest rate hikes but held no surprises to rattle investors.

Tokyo, Hong Kong and Sydney fell while Shanghai and Southeast Asian markets gained. Oil prices rose.

Investors are uneasy over the impact of interest rate hikes in the United States and other Western economies to cool surging inflation. Wednesday's Fed release showed board members support 0.5-percentage-point hikes at their next two meetings. That will weigh on economic activity but already was factored into stock prices.

There were no “hawkish or dovish surprises” or mention of a bigger increase, said Anderson Alves of ActivTrades in a report.

The Shanghai Composite Index gained 0.6% to 3,125.40 while the Nikkei 225 in Tokyo lost 0.2% to 26,639.04. The Hang Seng in Hong Kong sank 0.6% to 20,043.93.

The Kospi in Seoul declined 0.3% to 2,610.30. The Bank of Korea, as expected, raised its benchmark interest rate by 25 basis points to 1.75%.

“Upside risks abound from high energy prices, supply chain disruptions and rising global food prices," Capital Economics said in a report. “With price pressures set to remain elevated in the near term, we expect the Bank to continue hiking in quick succession over the coming months."

Sydney's S&P-ASX 200 was 0.5% lower at 7,116.70.

India's Sensex opened down 0.4% at 53,514.81. New Zealand declined while Southeast Asian markets rose.

On Wall Street, the benchmark S&P 500 index rose 0.9% to 3,978.73. The Dow Dow Jones Industrial Average gained 0.6% to 32,120.28. The Nasdaq composite climbed 1.5% to 11,434.74.

The minutes from the Fed meeting this month show most board members agreed that half-point increases to the Fed's benchmark short-term rate “would likely be appropriate.” That would be double the usual margin of increases.

Investors also are worried about the impact of Russia's February invasion of Ukraine and an unexpectedly sharp Chinese economic slowdown.

They hope the Fed will be able to cool inflation that is running at a four-decade high without tipping the biggest global economy into recession.

The Fed raised its key interest rate by 0.5 percentage points at its May meeting in its most aggressive move in two decades. It indicated more hikes were to come.

The S&P 500 is coming off of a seven-week series of declines that came close to ending the bull market for stocks that began in March 2020.

In energy markets, benchmark U.S. crude added 42 cents to $110.75 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oils, gained 18 cents to $111.30 per barrel in London.

The dollar rose to 127.40 yen from 127.32 yen. The euro declined to $1.0678 from $1.0688.