Asian stocks were mixed after Wall Street rallied overnight following comments from Federal Reserve Chair Jerome Powell. The Dow Jones Industrial Average rose 0.9%, the S&P 500 gained 0.6%, and the Nasdaq Composite added 0.8%. In Asia, the Nikkei 225 in Japan edged 0.2% higher and the Shanghai Composite in mainland China was up 0.2%. The Hang Seng Index in Hong Kong slipped 0.1%. South Korea’s Kospi was flat. In Australia, the S&P/ASX 200 was down 0.2%.
BANGKOK (AP) – Stocks in Asia were mixed on Wednesday after Wall Street stocks rose after comments from Federal Reserve Chairman signaling that last week’s surprisingly strong jobs report will not affect its stance on interest rate hikes.
Hong Kong, Sydney and Seoul rose while Tokyo and Shanghai fell. US futures fell while oil prices were little changed.
The benchmark S&P 500 index rose 1.3% after a shaky day that saw stocks switch between losses and gains as Fed Chair Jerome Powell made his first public comments since last week’s rate hike. Other indices also rose.
Investors are caught between hopes that the Fed will scale back rate hikes as inflation cools and concerns that strong jobs data herald a possible rebound in price pressures, SPI Asset Management’s Stephen Innes said in a comment.
“For the foreseeable future, central banks are not as important as economic data will be,” Innes said.
Tokyo stocks were hurt by losses at electronics and technology companies including Nintendo and Sharp Corp. weighed down, which reported weaker-than-expected earnings.
SoftBank fell 5.1% after net income fell $5.9 billion in its most recent quarter. Nintendo slipped 7.5% after its latest earnings update, which showed April-December profits slightly down year-on-year. Sharp shares fell 12.6%.
The Nikkei 225 Index lost 0.3% to 27,606.46. The Shanghai Composite Index lost 0.5% to 3,232.11. Hong Kong’s Hang Seng was unchanged at 21,297.43. In Australia, the S&P/ASX 200 was up 0.4% to 7,530.10.
South Korea’s Kospi rose 1.3% to 3,396.58. Stocks slipped in Bangkok and rose in Taiwan and Singapore.
On Tuesday on Wall Street, the S&P 500 rose to 4,164.00 and the Dow was up 0.8% to 34,156.69. The Nasdaq rose 1.9% to 12,113.79.
High inflation and how high the Fed will charge interest rates to fight it has been the focus of Wall Street’s volatility over the past year. Powell said Tuesday progress is being made on inflation, although there is still a long battle ahead.
That echoed similar comments he made last week after the Fed approved its smallest rate hike since March, before a staggering Friday jobs report showed US employers added a third of a million more jobs last month than expected.
This raised concerns about upward pressure on inflation and fears that the Fed could keep rates high for longer, as it has warned. Higher interest rates can lower inflation, but they can also hurt the economy and asset prices.
Powell said Tuesday at the Washington, DC Economic Club that the market’s big moves since the jobs report have brought him closer to the Fed’s mindset. Not only did stocks fall, Wall Street also raised its forecast of how high the Fed will hike interest rates through the summer.
“We have a significant path ahead of us to bring inflation down to 2%,” said Powell, the Fed’s target. “It was expected to go away quickly and painlessly. I don’t think that’s guaranteed at all.”
Despite all the recent market moves, the S&P 500 is up 8.5% this year. Much of this was due to easing concerns that the economy could fall into a deep recession, a scenario that markets are calling a “hard landing”.
For the other day of trading on Wednesday, US benchmark crude rose 11 cents to $77.25 a barrel in electronic trading on the New York Mercantile Exchange. On Tuesday it was up $3.03 to $77.14 a barrel.
Brent crude, the price benchmark for international trade, rose 1 cent to $83.70 a barrel.
The US dollar fell to 130.95 Japanese yen from 131.11 yen. The euro rose to $1.0745 from $1.0726.
Elaine Kurtenbach, The Associated Press
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