BEIJING (`) – Asian stock markets were higher on Wednesday after Wall Street rallied for some time ahead of what is hoped to be the Federal Reserve’s last rate hike.
Shanghai, Tokyo, Hong Kong and Sydney have made progress. US futures declined. oil prices have risen.
Traders are expecting the Fed to announce a 0.25 percentage point rate hike but are hoping that will be the last for some time after Tuesday’s data showed US wage growth slowing in late 2022. They fear that interest rate hikes in the US and Europe to cool inflation could push the global economy into recession.
Wall Street’s benchmark S&P 500 index rose 1.5% after traders interpreted the payroll data as a sign the Federal Reserve may believe its efforts to slow economic activity are having an impact.
Investors will be watching as the Fed describes its decision and will preside over comments from Jerome Powell at a planned news conference for signs of whether the Federal Reserve will ease its plans for further rate hikes, ActivTrades’ Anderson Alves said in a report.
“A hawkish decision could put severe pressure on all asset classes,” Alves said, while a more dovish outlook “could raise expectations that the Fed could start cutting rates again in the last quarter of this year.”
The Shanghai Composite Index rose 0.1% to 3,258.93 after two surveys showed Chinese factory activity picked up in January, but with weak global demand and the COVID-19 outbreak disrupting business, are still muted.
Tokyo’s Nikkei 225 rose less than 0.1% to 27,338.09 and Hong Kong’s Hang Seng rose 0.3% to 21,902.35.
Seoul’s Kospi rose 0.4% to 2,433.39 and Sydney’s S&P ASX 200 rose 0.3% to 7,498.00.
India’s Sensex opened up 0.8% to 60,015.24. Singapore fell while New Zealand and other Southeast Asian markets rose.
On Wall Street, the S&P 500 rose to 4,076.60 by the end of January, its third monthly gain in the past four months.
The Dow Jones Industrial Average rose 1.1% to 34,086.04. The Nasdaq rose 1.7% to 11,584.55.
Traders are expecting a 0.25 percentage point Fed rate hike, the smallest range since March after three jumps of 0.75 and then one of 0.5.
Investors are hoping the Fed will declare victory and reverse its rate hikes starting later this year, despite repeated warnings from central bank officials that borrowing costs could remain high for an extended period.
Other data released Tuesday showed consumer confidence and a separate measure of Midwest business activity both weaker than expected.
The latest round of corporate earnings reports was mixed.
McDonald’s fell 1.3% despite reporting stronger-than-expected profit and sales, suggesting investors may be concerned about upcoming profit margins as the economy slows.
Caterpillar fell 3.5% after reporting weaker-than-expected earnings but higher sales.
General Motors 8.3% after reporting stronger-than-expected earnings and sales.
In energy markets, the reference price for US crude rose 33 cents to $79.20 a barrel in electronic trading on the New York Stock Exchange. The contract rose 97 cents on Tuesday to $78.87. Brent crude, the price basis for international oil trading, rose 24 cents to $85.70 a barrel in London. In the previous session, it fell 41 cents to $84.49.
The dollar rose to 130.25 yen from 130.21 yen on Tuesday. The euro rose to $1.0867 from $1.0865.
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