Asian markets mixed after Powell warns of further rate hikes Associated Press

By Associated Press

BEIJING — Asian stock markets were mixed Wednesday after Wall Street rose and the Federal Reserve’s chairman said it will raise interest rates further if needed to cool inflation.

The Nikkei 225 /zigman2/quotes/210597971/delayed JP:NIK +1.97% in Tokyo gained 0.7% after the government reported economic output shrank 0.2% in the first three months of 2022 . That was stronger than expectations.

The Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP +0.55% lost 0.4% and the Hang Seng /zigman2/quotes/210598030/delayed HK:HSI +0.47% in Hong Kong sank 0.6%.

The Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.16% in Seoul slipped 0.1% and Sydney’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.32% advanced 0.9%. Benchmark indexes in New Zealand /zigman2/quotes/211587880/delayed NZ:NZ50GR -0.22% , Singapore /zigman2/quotes/210597985/delayed SG:STI +0.01% , Taiwan /zigman2/quotes/210597977/delayed TW:Y9999 +0.91% and Indonesia /zigman2/quotes/210597981/delayed ID:JAKIDX +0.42% advanced.

On Wall Street, the benchmark S&P 500 index rose by an unusually wide daily margin of 2% after positive U.S. retail sales data helped to offset concern about inflation.

The Fed will “have to consider moving more aggressively” if inflation that is running at a four-decade high fails to ease after earlier rate hikes, chair Jerome Powell said at a Wall Street Journal conference.

Expectations of rate hikes “ticked higher” due to Powell’s comments, but “markets are shrugging it off and are in need of a breather” after a sell-off, Yeap Jun Rong of IG said in a report.

On Wall Street, the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.23% advanced to 4,088.85. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.07% rose 1.3% to 32,654.59. The Nasdaq /zigman2/quotes/210598365/realtime COMP +0.37% gained 2.8% to 11,984.52.

Investors welcomed a Commerce Department report that showed retail sales rose 0.9% in April.

Consumers are providing critical support to the economy despite higher costs for gas, food and rent. The economy contracted in the first three months of the year, but consumer and business spending still increased at a healthy pace.

The Fed and other central banks are raising interest rates that have been near zero during the coronavirus pandemic or say they plan to in order to cool inflation.

Supply chain problems have prompted businesses to raise prices on everything from food to clothing as demand rebounds after the pandemic.

Oil and gas prices have been pushed up by Russia’s war on Ukraine, which fueled fears Russian supplies might be disrupted.

In energy markets, benchmark U.S. crude rose $1.13 per barrel to $113.52 in electronic trading on the New York Mercantile Exchange. The contract fell $1.80 on Tuesday to $112.40. Brent crude , the price basis for international oil trading, added 60 cents to $112.53 per barrel in London. It lost $2.31 the previous session to $111.93.

The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.3246% declined to 129.17 yen from Tuesday’s 129.42 yen.

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