Asian Stocks Gain Ahead of Fed Update

BEIJING (AP) Asian stock markets rose Wednesday ahead of the release of minutes from a Federal Reserve meeting that investors hope will show that the U.S. central bank is moderating its plans for more rate hikes to curb inflation. cooling.

Shanghai, Hong Kong, Seoul and Sydney advanced. Tokyo retreated. Oil prices had changed little.

Wall Street fell Tuesday on the first trading day of the year after its biggest annual decline in 14 years in 2022.

Traders worry that the Fed and other central banks may be willing to push the world into recession to quench inflation that has been high for decades. They hope that the minutes of the Fed’s December meeting due out Wednesday could show that policymakers are cutting or delaying planned rate hikes because of signs that economic activity is slowing.

While the Fed expects to keep rates high for longer, markets continue to push back, betting on easier policy, Rubeela Farooqi and John Silvia of High-Frequency Economics said in a report. However, they said that this year we don’t think there will likely be a pivot towards rate cuts.

FILE – Flags grace the facade of the New York Stock Exchange, Wednesday, June 16, 2021. (AP Photo/Richard Drew, File)

Photo: ASSOCIATED PRESS/Richard Drew

A currency trader walks past the display showing the Korea Composite Stock Price Index (KOSPI) at a currency exchange counter in Seoul, South Korea, Wednesday, January 4, 2023. Asian stock markets rose Wednesday ahead of the release of minutes from a Federal Reserve meeting which investors hope could show that the US Federal Reserve is moderating its plans for more rate hikes to cool inflation. (AP Photo/Lee ​​Jin-man)

Photo: ASSOCIATED PRESS/Lee Jin-man

A currency trader walks past the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the exchange rate between the US dollar and the South Korean won at a bureau de change in Seoul, South Korea, Wednesday, January 4. 2023. Asian stock markets rallied Wednesday ahead of the release of minutes from a Federal Reserve meeting that investors hope could show that the U.S. central bank is moderating its plans for more rate hikes to cool inflation. (AP Photo/Lee ​​Jin-man)

Photo: ASSOCIATED PRESS/Lee Jin-man

Currency traders look at computer screens at a currency exchange office in Seoul, South Korea, Wednesday, January 4, 2023. Asian stock markets rose Wednesday ahead of the release of minutes from a Federal Reserve meeting that investors hope will leave to the U.S. central bank see moderating its plans for more rate hikes to cool inflation. (AP Photo/Lee ​​Jin-man)

Photo: ASSOCIATED PRESS/Lee Jin-man

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The Shanghai Composite Index gained 0.4% to 3,128.38 while Tokyo’s Nikkei 225 fell 1.4% to 25,724.66. The Hang Seng in Hong Kong rose 2.2% to 20,581.92.

Seoul’s Kospi rose 1.2% to 2,244.47 and Sydney’s S&P-ASX 200 rose 1.4% to 7,043.90. New Zealand and Singapore advanced while Jakarta retreated.

On Wall Street, the benchmark S&P 500 index lost 0.4% to 3,824.14.

The S&P 500 gained 1% and ended 0.4% lower. The Dow Jones Industrial Average fell less than 0.1% to 33,136.37. The Nasdaq index fell 0.8 percent to 10,386.98 points.

Technology stocks were among the largest weights in the market. Apple fell 3.7%, putting its market value below $2 trillion for the first time since March 8, 2021. Shares of the iPhone maker fell nearly 27% in 2022, their first annual decline in four years.

On top of inflation concerns, investors are worried about the impact of Russia’s war on Ukraine and the COVID-19 outbreaks in China.

The Fed’s key lending rate is between 4.25% and 4.5%, up from nearly zero after seven hikes last year.

The US central bank forecasts it will reach a range of 5% to 5.25% by the end of 2023. She is not calling for a rate cut before 2024.

The US government will publish December employment figures on Thursday. These are expected to show a decrease in the number of recruitments. Investors hope this will encourage the Fed to cut or delay potential rate hikes.

The next central bank policy decision on interest rates is scheduled for February 1.

Investors are also looking for corporate earnings reports in mid-January. Analysts polled by FactSet expect earnings for companies in the S&P 500 to decline in the fourth quarter and flat in the first half of 2023.

In the energy markets, US crude fell 5 cents to $76.88 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $3.33 to $76.93 on Tuesday. Brent crude, the price base for international oil trading, gained 15 cents to $82.25 a barrel in London. It lost $3.81 the previous session to $82.10.

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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