Stocks rise in Tokyo but slip in Hong Kong
BEIJING — Asian stock markets were mixed Wednesday after Wall Street rose and the Federal Reserve’s chairman said it will raise interest rates further if needed to cool inflation.
The Nikkei 225 JP:NIK in Tokyo gained 0.7% after the government reported economic output shrank 0.2% in the first three months of 2022. That was stronger than expectations.
The Shanghai Composite Index CN:SHCOMP lost 0.4% and the Hang Seng HK:HSI in Hong Kong sank 0.6%.
The Kospi KR:180721 in Seoul slipped 0.1% and Sydney’s S&P/ASX 200 AU:XJO advanced 0.9%. Benchmark indexes in New Zealand NZ:NZ50GR, Singapore SG:STI, Taiwan TW:Y9999 and Indonesia ID:JAKIDX advanced.
On Wall Street, the benchmark S&P 500 index rose by an unusually wide daily margin of 2% after positive U.S. retail sales data helped to offset concern about inflation.
The Fed will “have to consider moving more aggressively” if inflation that is running at a four-decade high fails to ease after earlier rate hikes, chair Jerome Powell said at a Wall Street Journal conference.
Expectations of rate hikes “ticked higher” due to Powell’s comments, but “markets are shrugging it off and are in need of a breather” after a sell-off, Yeap Jun Rong of IG said in a report.
On Wall Street, the S&P 500 SPX advanced to 4,088.85. The Dow Jones Industrial Average DJIA rose 1.3% to 32,654.59. The Nasdaq COMP gained 2.8% to 11,984.52.
Investors welcomed a Commerce Department report that showed retail sales rose 0.9% in April.
Consumers are providing critical support to the economy despite higher costs for gas, food and rent. The economy contracted in the first three months of the year, but consumer and business spending still increased at a healthy pace.
The Fed and other central banks are raising interest rates that have been near zero during the coronavirus pandemic or say they plan to in order to cool inflation.
Supply chain problems have prompted businesses to raise prices on everything from food to clothing as demand rebounds after the pandemic.
Oil and gas prices have been pushed up by Russia’s war on Ukraine, which fueled fears Russian supplies might be disrupted.
In energy markets, benchmark U.S. crude CLM22 rose $1.13 per barrel to $113.52 in electronic trading on the New York Mercantile Exchange. The contract fell $1.80 on Tuesday to $112.40. Brent crude BRNN22, the price basis for international oil trading, added 60 cents to $112.53 per barrel in London. It lost $2.31 the previous session to $111.93.
The dollar USDJPY declined to 129.17 yen from Tuesday’s 129.42 yen.