BEIJING (AP) — Asian stocks were mostly higher on Tuesday as investors braced for another sharp interest rate hike by the Federal Reserve to cool inflation.
Shanghai, Hong Kong and Seoul advanced. Tokyo went down. Oil rose more than $1 a barrel.
Wall Street ended up 0.1% on Monday ahead of this week’s Fed meeting where 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 investor sentiment is divided, with optimists looking for a “recovery from the Fed,” Mizuho Bank’s Tan Boon Heng said in a report.
The Shanghai Composite rose 0.8% to 3,276.71, while Tokyo’s Nikkei 225 fell less than 0.1% to 27,680.41. The Hang Seng in Hong Kong gained 1.5% to 20,868.29.
Alibaba Group, the world’s largest e-commerce company, announced plans on Tuesday to change the status of its Hong Kong-traded shares to make them more accessible to buyers in mainland China.
Alibaba went public in New York in September 2014 and completed a secondary listing in Hong Kong in November 2019. The proposed change would upgrade Alibaba’s Hong Kong status to a primary listing alongside New York, making the shares are eligible for purchase through continental intermediaries.
Seoul’s Kospi rose 0.2% to 2,408.60 after the government reported that South Korea’s economy grew a stronger-than-expected 0.7% from the previous quarter in the three months ending in June.
Sydney’s S&P-ASX 200 rose 0.1% to 6,798.00.
India’s Sensex opened up 0.7% at 55,365.32. New Zealand retreated while Southeast Asian markets gained.
Investors fear that aggressive rate hikes by the Fed to contain inflation that are at four-decade highs and similar action by central banks in Europe and Asia could derail global economic growth.
US inflation has accelerated to 9.1%, its highest since 1981.
The US economy is slowing, but healthy hiring shows it is not in recession, Treasury Secretary Janet Yellen said on 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 are posting solid 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 cut its profit outlook for the second quarter and full year. The company said shoppers are cutting back on discretionary items, particularly apparel, which have 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 expect a second quarter of 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 report results. So are Coca-Cola and McDonald’s.
In energy markets, benchmark U.S. crude rose $1.29 to $97.99 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $2 to $96.70 on Monday. Brent crude, the price base for international trade, advanced $1.33 to $101.52 a barrel in London. It added $1.95 the previous session to $105.15.
The dollar fell to 136.49 yen from 136.72 on Monday. The euro rose to $1.0230 from $1.0221.
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AP Technology Writer Zen Soo contributed.
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