Asian stocks mixed after Wall St steadies amid rate fears

By JOE McDONALD
AP Business Writer

BEIJING (AP) — Asian stock markets were mixed Thursday after Wall Street steadied following a plunge on worries about more U.S. interest rate hikes.

Shanghai and Seoul declined. Tokyo and Hong Kong advanced. Oil prices edged lower.

Wall Street’s benchmark S&P 500 index recovered some of the previous day’s loss following Federal Reserve chair Jerome Powell’s warning rate hikes might speed up because upward pressure on prices is stronger than expected.

Investors worry the Fed and other central banks look increasingly likely to tip the global economy into at least a brief recession to extinguish stubborn inflation. U.S. inflation rose to 5.4% in January over a year earlier from December’s 5.3% — well above the Fed’s target of 2%.

“The risks of a higher and faster hike trajectory have risen,” Stephen Innes of SPI Asset Management said in a report. He said the Fed might be motivated by “mounting criticism” that it has “fallen behind the inflation curve.”

The Shanghai Composite Index lost 0.7% to 3,260.65 after China’s government reported inflation decelerated in February to 1% over a year earlier from the previous month’s 2.5%. The Hang Seng in Hong Kong shed 0.2% to 20,014.37.

The Nikkei 225 in Tokyo gained 0.6% to 28,604.56 after the government cut its estimate of economic growth in the three months ending in December to 0.1% from a previous estimate of 0.6%.

The Kospi sank 0.2% to 2,426.41 and Sydney’s S&P-ASX 200 was little-changed at 7,308.50.

New Zealand and Singapore declined while Jakarta rose.

On Wall Street, the S&P 500 rose 0.1% to 3,992.01.

The Dow Jones Industrial Average fell 58.06, or 0.2%, to 32,798.40, while the Nasdaq composite added 45.67, or 0.4%, to 11,576.00.

Powell said Wednesday that Fed policymakers want to see more data before deciding on future rate hikes.

A report Wednesday showed the number of job openings advertised across the country last month was higher than expected. Traders scrutinize such data for clues about wages, one factor the Fed looks at in trying to forecast inflation.

The report also showed some signs of easing pressure, including fewer Americans quitting their jobs.

A separate report Wednesday suggested hiring is still stronger across U.S. private employers than expected.

The U.S. government’s more comprehensive monthly report on hiring is due out Friday.

Other data showed strong U.S. consumer spending, another factor policymakers worry might push up prices.

Expectations for a firmer Fed have been most clear in the bond market, where yields have shot higher.

The yield on the 10-year Treasury, or the difference between its market price and the payout at maturity, ticked up to 3.98% from 3.97% late Tuesday.

The yield on the two-year Treasury rose to 5.05% from 5.02%. It’s near its highest level since 2007.

Yields on shorter-term Treasurys are above those for Treasurys that pay off farther in the future. Wall Street sees that as a fairly reliable indicator of an impending recession.

In energy markets, benchmark U.S. crude lost 2 cents to $76.64 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 92 cents on Wednesday to $76.66. Brent crude, the price basis for international oil trading, shed 3 cents to $82.63 per barrel in London. It retreated 63 cents the previous session to $82.66.

The dollar declined to 136.97 yen from Wednesday’s 137.24 yen. The euro was little-changed at $1.0546.