Asian stocks up ahead of possible US rate hike | Associated press

BEIJING (AP) — Asian stock markets were mostly up on Tuesday as investors braced for another sharp hike in interest rates by the Federal Reserve to cool inflation.

Shanghai, Hong Kong and Seoul are progressing. Tokyo fell slightly. Oil rose more than $1 a barrel.

Wall Street ended up 0.1% on Monday ahead of this week’s Fed meeting in which officials are expected to announce a rate hike of up to three-quarters of a percentage point, triple the usual margin. That would put the Fed’s benchmark rate in a range of 2.25% to 2.5%, the highest since 2018 before the coronavirus pandemic.

Mixed market reactions suggest investors’ sentiments are mixed and optimists are hoping for a “recall from the Fed,” Mizuho Bank’s Tan Boon Heng said in a report.

The Shanghai Composite Index rose 0.6% to 3,270.31 while the Nikkei 225 in Tokyo lost less than 0.1% to 27,581.73. The Hang Seng in Hong Kong gained 1.4% to 20,808.56.

Alibaba, the largest e-commerce company in China said on Tuesday it planned to apply for a primary listing in Hong Kong. The move would make Alibaba a listed company on both the New York Stock Exchange and the Hong Kong Stock Exchange.

Alibaba went public in New York in September 2014 and completed a secondary listing in Hong Kong in November 2019.

CEO Daniel Zhang said the company is looking for an alternate primary listing venue to foster a broader and more diverse investor base. It would seem that these are mainly mainland Chinese investors.

Seoul’s Kospi gained 0.3% to 2,408.85 and Sydney’s S&P-ASX 200 rose 0.1% to 6,798.00. New Zealand fell while Southeast Asian markets gained.

Investors fear that aggressive rate hikes by the Fed to contain inflation that is at its highest level in four decades and similar action by central banks in Europe and Asia could derail the global economic growth.

US inflation accelerated to 9.1%, its highest level since 1981.

The U.S. economy is slowing, but healthy hiring shows it’s not in a recession, Treasury Secretary Janet Yellen said Sunday. Fed officials who have publicly backed a rate hike also cite a relatively strong labor market as evidence that the economy can withstand higher borrowing costs.

On Wall Street, the S&P 500 advanced to 3,966.84 on Monday. The Dow Jones Industrial Average rose 0.3% to 31,990.04. The Nasdaq Composite fell 0.4% to 11,782.67.

Major indexes posted strong gains last week after a mix of mostly better than expected corporate earnings reports.

Walmart shares fell nearly 10% in after-hours trading on Monday after the retail giant lowered its profit outlook for the second quarter and the full year. The company said shoppers were cutting back on discretionary items, especially apparel, which generate higher profit margins.

On Thursday, the Commerce Department is due to release its first estimate of US economic growth in the three months ending in June. Some forecasters are expecting a second quarter contraction after output fell 1.6% in the three months to March.

Also this week, tech heavyweights Apple, Meta, Microsoft and Amazon are due to release their results. Just like Coca-Cola and McDonald’s.

In energy markets, benchmark U.S. crude rose $1.62 to $98.32 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $2 to $96.70 on Monday. Brent crude, the price basis for international trade, advanced $1.80 to $101.99 a barrel in London. It added $1.95 the previous session at $105.15.

The dollar fell to 136.49 yen from 136.72 on Monday. The euro fell from $1.0221 to $1.0237.

AP Technology Writer Zen Soo contributed.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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