Asian stocks mixed after Wall St steadies amid rate fears

BEIJING: Asian stock markets were mixed on Thursday after Wall Street steadied following a plunge on worries about more US interest rate hikes.

Shanghai and Seoul declined. Tokyo and Hong Kong advanced. Oil prices edged lower.

Wall Street's benchmark S and P 500 index recovered some of the previous day's loss following Federal Reserve chair Jerome Powell's warning that rate hikes might speed up because upward pressure on prices is stronger than expected.

Investors worry the Fed and other central banks look increasingly likely to tip the global economy into at least a brief recession to extinguish stubborn inflation. US inflation edged up in January to 5.4 per cent, well above the Fed's target of 2 per cent.

"The risks of a higher and faster hike trajectory have risen,'' Stephen Innes of SPI Asset Management said in a report. He said the Fed might be motivated by "mounting criticism" that it has "fallen behind the inflation curve''.

The Shanghai Composite Index lost 0.2 per cent to 3,277.13 after Chinese inflation decelerated in February to 1 per cent over a year earlier from the previous month's 2.5 per cent. The Hang Seng in Hong Kong advanced 0.3 per cent to 20,110.28.

The Nikkei 225 in Tokyo gained 0.6 per cent to 28,616.03 after the government cut its estimate of economic growth in the three months ending in December to 0.1 per cent from a previous estimate of 0.6 per cent.

The Kospi sank 0.4 per cent to 2,422.31 and Sydney's S and P-ASX 200 was up less than 0.1 per cent at 7,311.10.

India's Sensex opened down 0.2 per cent at 60,197.90. New Zealand and Singapore declined while Jakarta and Bangkok rose.

On Wall Street, the S and P 500 rose 0.1 per cent on Wednesday to 3,992.01.

The Dow Jones Industrial Average fell 58.06, or 0.2 per cent, to 32,798.40, while the Nasdaq composite added 45.67, or 0.4 per cent, to 11,576.00.

Powell said Fed policymakers want to see more data before deciding on future rate hikes.

A report on Wednesday showed the number of job openings advertised across the country last month was higher than expected. Traders scrutinize such data for clues about wages, one factor the Fed looks at in trying to forecast inflation.

The report also showed some signs of easing pressure, including fewer Americans quitting their jobs.

A separate report Wednesday suggested hiring is still stronger across US private employers than expected.

The US government's more comprehensive monthly report on hiring is due out Friday.

Other data showed strong US consumer spending, another factor policymakers worry might push up prices.

Expectations for a firmer Fed have been most clear in the bond market, where yields have shot higher.

The yield on the 10-year Treasury, or the difference between its market price and the payout at maturity, ticked up to 3.98 per cent from 3.97 per cent late Tuesday.

The yield on the two-year Treasury rose to 5.05 per cent from 5.02 per cent. It's near its highest level since 2007.

Yields on shorter-term Treasurys are above those for Treasurys that pay off further in the future. Wall Street sees that as a fairly reliable indicator of an impending recession.

In energy markets, benchmark US crude gained 4 cents to USD 76.70 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 92 cents on Wednesday to USD 76.66.

Brent crude, the price basis for international oil trading, added 4 cents to USD 82.70 per barrel in London. It retreated 63 cents the previous session to USD 82.66.

The dollar declined to 136.81 yen from Wednesday's 137.24 yen. The euro gained to USD 1.0554 from USD 1.0545.