Asian stocks mixed as new trading week kicks off
BEIJING (AP) – Asian stock markets were mixed on Monday after Wall Street fell last week, fearing the Federal Reserve would raise interest rates as early as March.
US stocks were also pointing to a mixed start to the week, with Dow futures remaining under modest pressure as the S&P 500 and Nasdaq Composite seemed increasingly likely to weather early declines.
Shanghai and Hong Kong have moved forward. Seoul and Sydney declined. Japanese markets NIY00,
were closed for holidays.
Investors were rocked last week after notes from the latest Fed meeting showed officials believe the U.S. labor market is healthy enough that it no longer needs ultra-low interest rates and other stimulus measures.
This was bolstered by US employment figures on Friday which showed higher-than-expected wages, albeit with only about half of expected hirings.
The prospect of past rate hikes “suggests that markets may continue to be disrupted by volatility,” Mizuho Bank’s Tan Boon Heng said in a report.
The Shanghai SHCOMP Composite Index,
gained 0.2% to 3,587.69 and the Hang Seng in Hong Kong HSI,
rose 0.9% to 23,702.90. The Kospi in Seoul 180721,
fell 1.2% to 2,919.46 and Sydney’s S&P ASX 200 XAO,
lost 0.1% to 7,444.70.
Investors were cautious after Fed officials said in December that plans to cut ultra-low rates and other economic stimulus that boosted stock prices could be accelerated to cool U.S. inflation. at its highest level in four decades.
See: Traders, little discouraged by disappointing job gains in December, continue to anticipate an “increasingly rapid” tightening by the Federal Reserve
On Friday, Wall Street’s benchmark S&P 500 SPX,
fell 0.4% to 4,677.03, about 2.5% below the January 3 record.
The Dow Jones Industrial Average DJIA,
slipped less than 0.1% to 36,231.66. The Nasdaq Composite COMP,
fell 1% to 14,935.90.
Investors estimate the probability that the Fed will hike short-term rates in March at over 79%. A month ago, they saw a less than 39% chance of this happening, according to CME Group.
Record interest rates have helped push up stock prices despite bouts of unease over the coronavirus pandemic.
The Fed has already slowed down bond purchases that pumped money into the financial system to lower commercial lending rates. Notes from its December meeting indicated that Fed officials may halt those purchases faster than expected.
On the energy markets, the American benchmark CL00 crude,
rose 17 cents to $ 79.07 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 56 cents on Friday to $ 78.90. Brent crude BRN00,
used to set the price of international oil, added 20 cents to $ 81.95 a barrel in London. It lost 24 cents the previous session to $ 81.75.
The dollar USDJPY,
won at 115.79 yen against 115.56 yen on Friday. The euro EURUSD,
declined to $ 1.1337 from $ 1.1362.