Stock Market Today: Asia stocks are trading mixed awaiting reports

TOKYO (AP) Asian stocks were seen trading mixed Tuesday as investors took a wait-and-see approach for the week ahead which is filled with reports of some of the market’s biggest concerns, including stubbornly high inflation across the economy.

The Japanese benchmark Nikkei 225 rose 1.1% in afternoon trading to 29,254.37. The Australian S&P/ASX 200 fell 0.2% to 7,263.80. The South Korean Kospi fell 0.2% to 2,508.30. The Hong Kong Hang Seng lost 0.6% to 20,177.55, while the Shanghai Composite rose 0.3% to 3,406.03.

Chinese exports grew 8.5% in April, showing more unexpected strength despite weaker global demand, according to customs data. Exports grew to $295.4 billion compared to a year earlier, albeit at a slower pace, building on the momentum seen in March data, when exports rose 14.8%.

But imports contracted more quickly, with an overall decline of 7.9% to $205.2 billion compared to the same time last year, according to data released Tuesday from the General Administration of Customs. In March it fell by 1.4%. Trade with the US and the European Union contracted compared to last year. China’s trade surplus widened in April, growing by 82.3% compared to the same period last year.

Asian equities traded sideways on Tuesday after US equities traded in a tight range and remained largely unchanged in volatile trading as investors reacted to mixed reactions to the Feds senior loan officer survey,” said Anderson Alves, analyst at ActivTrades. The study found that credit availability was tightening, impacting companies’ margins and signaling an impending economic slowdown.

On Wall Street, the S&P 500 rose less than 0.1% to 4,138.12, marking its worst week in nearly two months. The Dow Jones Industrial Average fell 0.2% to 33,618.69 while the Nasdaq index added 0.2% to 12,256.92.

A strong reading on US jobs, which calmed concerns about a potential recession but increased concerns about high inflation, and fears of smaller and medium-sized banks dominated last week. Burdened by much higher interest rates, smaller and medium-sized banks try to reassure Wall Street that their deposits are safe and not at risk of a sudden exodus, similar to the runs that brought down Silicon Valley Bank and others.

The bigger concern for the markets is that any unrest could lead to banks pulling back on lending. That, in turn, could increase the risk of a recession that many investors already consider very likely.

A report from the Federal Reserve on Monday showed that many banks tightened their lending standards during the first three months of the year. Not only that, the research suggested that banks generally expect to raise their standards over the course of 2023. One of the reasons some smaller and medium-sized banks gave for the forecast was that they wanted to take on less risk and were concerned about deposit outflows.

The Federal Reserve has raised its benchmark interest rate to a range of 5%-5.25% from near zero at the beginning of last year in hopes of slowing high inflation. High rates do that by slowing the economy and hurting prices for investments, risking a recession if they stay too high for too long.

The Fed said it is unsure of its next move as parts of the economy have shown sharp slowdowns, but the labor market remains largely resilient.

Later this week, the US government will provide the latest monthly updates on consumer and wholesale inflation. There will also be earnings reports from Duke Energy, The Walt Disney Co. and News Corp.

In energy trading, benchmark US crude fell 28 cents to $72.88 a barrel. Brent crude, the international standard, lost 32 cents to $76.69 a barrel.

In currency trading, the US dollar fell slowly from 135.04 yen to 134.93 Japanese yen. The euro was priced at $1.0990, down from $1.1008.

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AP Business Writer Stan Choe contributed from New York.