BEIJING– Asian stock markets did not go up or down on Wednesday. This was because they were waiting for the Federal Reserve to say how quickly it will raise interest rates to fight inflation in the United States.
Both Shanghai and Hong Kong advanced. Both Tokyo and Sydney are declining. Oil prices increased somewhat.
The S&P 500 index fell 0.4% on Tuesday as traders awaited the Federal Reserve’s rate hike, which was expected to be three-quarters of a percentage point, or four times the average range.They are concerned that the Fed’s aggressive efforts to curb inflation, which is at a four-decade high, may trigger a recession in the world’s largest economy.
According to a report by Anderson Alves of ActivTrades, a “hawkish surprise” from the Fed might be “additional shock to risk assets.” The financial markets have already priced in nearly a 90% chance of such action.
The Shanghai Composite Index went up by 1.1% to 3,323.64 after the Chinese government said that factory output in May went back up after anti-virus rules that shut down businesses in Shanghai and other industrial districts were eased.
The Hang Seng in Hong Kong increased 1.2% to 21,312.67, while the Nikkei 225 in Tokyo decreased 0.7% to 26,4301.
The Seoul Kospi plummeted 1.2% to 2,463.45 after the government reported that the unemployment rate in South Korea jumped from 0.1% to 2.8% in May.
Sydney’s S&P-ASX 200 index declined 0.4% to 6,658.40. Singapore and New Zealand made progress, whilst Jakarta declined.
On Wall Street, the S&P 500 fell to 3,735.48, a 21.8 percent drop from its peak on January 3. This indicates a bear market, or a 20% drop from the previous market peak.
The Dow Jones Industrial Average fell 0.5% to 30,364.83, and the Nasdaq Composite rose 0.2% to 10,828.35.
On Friday, when government data revealed that consumer prices climbed in May instead of falling as anticipated, expectations for an abnormally hefty Fed rate hike surged.
