Asian stocks mixed after Wall St falls on rate hike worries

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Asian stock markets are mixed after falling on Wall Street worries the Federal Reserve will raise interest rates as soon as March

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Shanghai and Hong Kong advanced. Seoul and Sydney declined. Japanese markets remained closed for the holiday.

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Investors were shocked last week after notes from the Fed’s latest meeting, officials thought the US job market is so healthy it may no longer need ultra-low interest rates and other stimulus.

This was reinforced by US employment numbers on Friday, which showed stronger-than-expected wages, albeit with only half as many hiring as forecast.

Tan Boon Heng of Mizuho Bank said in a report, “The prospect of earlier rate hikes suggests that volatility in the market may continue.”

The Shanghai Composite Index rose 0.2% to 3,587.69 and the Hang Seng in Hong Kong rose 0.9% to 23,702.90.

In Seoul, the Kospi fell 1.2% to 2,919.46 and Sydney’s S&P ASX 200 fell 0.1% to 7,444.70.

Fed officials said in December that investors were cautious that plans to roll back ultra-low rates and other economic stimulus that have boosted share prices are now set to cool US inflation to a four-decade high. can be accelerated.

On Friday, Wall Street’s benchmark S&P 500 index fell 0.4% to 4,677.03, or about 2.5% from its January 3 record high.

The Dow Jones Industrial Average slipped less than 0.1% to 36,231.66. The Nasdaq Composite fell 1% to 14,935.90.

Investors are pricing better at 79 percent that the Fed will raise short-term rates in March. A month earlier, they saw less than a 39% chance, according to CME Group.

Record-low interest rates have helped prop up stock prices despite unease about the coronavirus pandemic.

The Fed has already slowed bond purchases that were pumping money into the financial system to lower commercial lending rates. Notes from its December meeting indicate that Fed officials may cut such purchases more quickly than previously planned.

In energy markets, benchmark US crude rose 17 cents to $79.07 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 56 cents to $78.90 on Friday. Brent crude, used for the price of international oil, rose 20 cents to $81.95 a barrel in London. It fell 24 cents to $81.75 in the previous session.

The dollar rose to 115.79 yen from Friday’s 115.56 yen. The euro declined from $1.1362 to $1.1337.

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