Asian stocks fall after Fed confirms rate hike plans

BEIJING

Asian stock markets were mostly down on Thursday after notes from the Federal Reserve’s latest meeting confirmed expectations for further interest rate hikes, but held no surprises for investors.

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

Investors are concerned about the impact of interest rate hikes in the United States and other Western economies on slowing runaway inflation. Wednesday’s Fed statement showed board members backing 0.5 percentage point hikes at their next two meetings. This will weigh on economic activity, but has already been priced into equity prices.

There were no “hawkish or dovish surprises” or mention of a larger increase, ActivTrades’ Anderson Alves said 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 fell 0.6% to 20,043.93.

The Kospi in Seoul fell 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. the coming months.”

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

The Indian Sensex opened 0.4% lower at 53,514.81. New Zealand fell 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.

Minutes from the Fed’s meeting this month show most board members agreed that half-point increases in the Fed’s short-term benchmark rate “would likely be appropriate. “. This would be double the usual margin of increase.

Investors are also worried about the impact of Russia’s invasion of Ukraine in February and a sharp and unexpected Chinese economic slowdown.

They hope the Fed will be able to calm inflation, which is at its highest level in four decades, without tipping the world’s largest economy into recession.

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

The S&P 500 is coming off a seven-week streak of declines that nearly ended the equity bull market that began in March 2020.

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

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