Asian stocks mixed after wobbly gains on Wall St

Stocks were mixed in Asia on Thursday after a shaky trading day generated modest gains on Wall Street.

US futures barely changed as oil prices fell.

The Chinese central bank left its key rate unchanged. While other major economies are raising rates to calm inflation, China’s economy is slowing and price increases are muted.

The Shanghai Composite index lost 1.2% to 3,199.24, while Hong Kong’s Hang Seng index rose 0.3% to 18,904.42.

Tokyo’s Nikkei 225 index gained 0.2% to 27,875.91. Japan posted a record trade deficit for the month of August, due to high import costs for energy and other raw materials and a weak yen.

But analysts said they expect a rebalancing in the coming months.

“Motor vehicle production should continue to normalize as supply chain disruptions ease, while commodity price growth has slowed further,” Capital Economics’ Darren Tay said in a comment.

Seoul’s Kospi fell 0.4% to 2,401.83, while Australia’s S&P/ASX 200 gained 0.2% to 6,842.90.

Trading was tentative in New York on Wednesday, a day after the market’s worst fall in two years was triggered by fears that higher interest rates could trigger a recession.

A wholesale-level inflation report showed prices were still rising rapidly, with pressures building up below the surface, even as headline inflation slowed. He echoed a consumer inflation report on Tuesday, which raised expectations for interest rate hikes and triggered a rout for markets.

The S&P 500 added 0.3% to 3,946.01, while the Dow Jones rose slightly 0.1% to 31,135.09. The Nasdaq gained 0.7% to 11,719.68 and the Russell 2000 gained 0.4% to close at 1,838.46.

Traders now see a one-in-four chance the Fed could raise its benchmark rate by a full percentage point next week, four times more than usual, according to the CME Group. A day earlier, it was closer to a one in three chance. The site puts the likelihood of a three-quarters percentage point increase at 76%, up from 69% on Tuesday.

The central bank has already raised its benchmark interest rate four times this year, the last two increases by three-quarters of a percentage point.

The Fed is taking aggressive interest rate action to try to quell the highest inflation in four decades. Tuesday’s high price report jolted the market with signs that inflation is entering a more stubborn phase that could force an already resolute Fed to get more aggressive.

Wall Street is particularly concerned that rate hikes will slow the economy too much and push it into a recession. The Fed is trying to avoid this outcome, but the latest inflation reports suggest this is becoming a more difficult task.

The US economy as a whole has slowed, but consumers have remained resilient and the job market remains strong. Wall Street will get another update on the latest impact of inflation on spending when the government releases its August retail sales report on Thursday.

The market is also watching US-China tensions and the war in Ukraine, as trade and government officials brace for the possibility of a nationwide railroad strike later this week that could cripple a supply chain. already disturbed.

The railroads have already begun to cut shipments of hazardous materials and have announced plans to stop transporting refrigerated goods before Friday’s strike deadline. Companies that rely on Norfolk Southern, Union Pacific, BNSF, CSX, Kansas City Southern and other railroads to deliver raw materials and finished goods are planning for the worst.

Union Pacific fell 3.7% and Norfolk Southern 2.2%.

Biden administration officials are scrambling to come up with a plan to keep goods moving if the railroads are closed. The White House is also pressuring the two sides to settle their differences, and a growing number of business groups are pressuring Congress to be prepared to step in and block a strike if they can’t reach a settlement. OK.

In other trading Thursday, benchmark U.S. crude oil was unchanged at $88.48 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.17 on Wednesday.

Brent crude, the pricing basis for international trade, slipped 24 cents to $93.86 a barrel.

The dollar fell from 143.16 Japanese yen to 143.69 yen on Wednesday evening. The euro weakened to 99.63 cents from 99.77 cents.

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