BEIJING, China (AP) – Asian stock markets climbed on Wednesday ahead of the publication of minutes from a Federal Reserve meeting, which investors think would reveal that the United States central bank is easing its plans for future interest rate rises to tame inflation.
Shanghai, Hong Kong, Seoul, and Sydney all saw gains. Tokyo has withdrawn. Oil prices moved slightly.
Wall Street slumped on the first trading day of the year on Tuesday, after its largest yearly fall in 14 years in 2022.
Traders are concerned that the Fed and other central banks would be ready to plunge the globe into recession in order to combat multi-decade high inflation. They are hoping that minutes from the Fed's December meeting, which are coming out Wednesday, would indicate policymakers are decreasing or delaying anticipated rate rises due to signals that economic growth is weakening.
“While the Fed plans to keep rates higher for longer, markets continue to push back, banking on softer policy,” High-Frequency Economics' Rubeela Farooqi and John Silvia said in a research. “We do not believe a switch to rate decreases is probable this year,” they stated.
The Shanghai Composite Index rose 0.4% to 3,128.38, while Tokyo's Nikkei 225 fell 1.4% to 25,724.66. The Hong Kong Hang Seng Index increased 2.2% to 20,581.92.
The Kospi in Seoul rose 1.2% to 2,244.47, while the S&P-ASX 200 in Sydney rose 1.4% to 7,043.90. Singapore and New Zealand climbed, while Jakarta fell.
The benchmark S&P 500 index fell 0.4% to 3,824.14 on Wall Street.
The S&P 500 lost 1% of its gain and closed 0.4% down. The Dow Jones Industrial Average fell 0.1% to 33,136.37. The Nasdaq composite fell 0.8% to 10,386.98 points.
Technology stocks were among the market's heavyweights. Apple's market worth decreased by 3.7%, falling below $2 trillion for the first time since March 8, 2021. In 2022, Apple shares declined roughly 27%, marking the company's first annual fall in four years.
In addition to inflation fears, investors are concerned about the effect of Russia's conflict on Ukraine and China's COVID-19 breakouts.
The Fed's main lending rate now ranges from 4.25% to 4.5%, up from near zero after seven hikes last year.
The Federal Reserve of the United States predicts that it will be in the 5% to 5.25% range by the end of 2023. It does not advocate for a rate decrease until 2024.
The government of the United States is set to reveal December employment numbers on Thursday. Hiring is likely to fall in these areas. Investors are hoping that this would persuade the Fed to cut or postpone further rate rises.
The next interest rate policy decision by the central bank is scheduled on February 1.
Investors are also anticipating corporate earnings reports in mid-January.
Earnings for S&P 500 businesses are expected to fall in the fourth quarter and stay flat in the first half of 2023, according to FactSet surveyed analysts.
On the New York Mercantile Exchange, benchmark US crude fell 5 cents to $76.88 a barrel in electronic trading. On Tuesday, the contract declined from $3.33 to $76.93. Brent crude, the international oil trade benchmark, rose 15 cents to $82.25 per barrel in London. To $82.10, it fell $3.81 from the previous session.
The dollar rose to 130.80 yen from 131.03 yen on Tuesday. The euro rose from $1.0547 to $1.0570.
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