Asian stocks mixed after Wall St falls, China retail slows

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Andrew Feinberg

White House Correspondent

Asian stocks gained Tuesday after Wall Street gave back some of last week's huge gains, the American and Chinese presidents met and China's consumer spending shrank in a sign its economy is weakening.

Shanghai, Tokyo and Hong Kong, which are the bulk of the region's market capitalization, advanced. South Korea and Sydney declined. Oil prices retreated.

Wall Street's benchmark S&P 500 lost 0.9% on Monday, giving back part of last week's 5.9% surge after lower U.S. inflation encouraged hopes the Federal Reserve might ease off planned rate hikes to rein in surging prices.

Presidents Joe Biden and Xi Jinping met during a summit of the Group of 20 major economies in Indonesia. That fed hopes for an easing of U.S.-Chinese tension over security, trade, technology and human rights.

Monday's meeting was “surprisingly positive,” but the “feel-good factor that had been driving markets following the softer-than-expected October CPI release in the U.S. evaporated," said Robert Carnell and Nicholas Mapa of ING in a report.

The Shanghai Composite Index gained 1.3% to 3,123.26 after Chinese consumer spending contracted by 0.5% in October over a year ago under pressure from increased anti-virus controls. Growth in factory activity also weakened.

The performance was worse than expected by forecaster who say Chinese economic activity will cool as interest rate hikes by global central banks depress demand for exports.

The Hang Seng in Hong Kong advanced 3.2% to 18,179.34 and the Nikkei 225 in Tokyo gained 0.1% to 28,002.40.

Seoul's Kospi sank less than 0.1% to 2,472.93 and Sydney's S&P-ASX 200 shed less than 0.1% to 7,141.60.

India's Sensex opened down 0.2% at 61,497.16. New Zealand, Singapore and Bangkok gained while Indonesia was lower.

On Wall Street, the S&P 500 declined to 3,957.25. The Dow Jones Industrial Average lost 0.6% to 33,536.70. The Nasdaq composite fell 1.1% to 11,196.22.

Investors worry that this year's repeated interest rate increases to cool inflation that is near multi-decade highs might tip the global economy into recession.

Traders expected the Fed to raise its benchmark lending rate again at its December but by a smaller margin of one-half percentage point after four hikes of 0.75 percentage points.

Fed officials say rates might have to stay elevated for an extended time to cool prices.

The government is due to report U.S. wholesale inflation on Tuesday. Economists say it likely slowed to 8.3% from September’s 8.5%.

On Wednesday, the U.S. government gives an update on retail spending. Economists say growth likely revived to 0.9% in October from the previous month's flat performance.

In energy markets, benchmark U.S. crude lost 79 cents to $85.08 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $3.09 to $85.87 on Monday. Brent crude, the price basis for international oil trading, shed 54 cents to $92.60 per barrel in London. It fell $2.85 the previous session to $93.14.

The dollar rose to 140.30 yen from Monday's 139.92 yen. The euro fell to $1.0332 from $1.0353.