Asian stocks higher after Wall Street declines on growth worries

BEIJING

The Federal Reserve chairman was credited with boosting Asian stock markets Thursday. saidThe U.S. central banking wants to avoid causing recession, but one is possible because it raises interest rates in order to cool inflation.

Shanghai, Tokyo, and Hong Kong advanced. Seoul declined. Oil prices dropped by US$2 per barrel to close to $100

The Fed doesn’t want to “provoke a recession,” but one is possible due to rate hikes to cool inflation that is running at a four-decade high, chair Jerome Powell saidWednesday: Talking to members of Congress

“It’s not our intended outcome, but it’s certainly a possibility,” Powell said.

Wall Street’s benchmark S&P 500 index lost 0.1% after swinging between a gain of 1% and a loss of 1.3% during the day.

“The market accepts that recession is a risk. It has been in total denial.” saidMichael Every of Rabobank, in a report.

The Shanghai Composite Index rose 0.6%, to 3,285.99, while the Nikkei225 in Tokyo gained 0.2%, to 26,191.97. The Hang Seng Hong Kong increased 1% to 21209.09.

The Kospi in Seoul retreated 0.6% to 2,327.73 while Sydney’s S&P-ASX 200 rose 0.4% to 6,534.10.

India’s Sensex gained 1.1% to 10,799.50. While Jakarta fell, New Zealand, Singapore, and Bangkok advanced.

The Fed raised its benchmark rate by three quarters a percentage point last week. This is three times its usual margin and its largest increase in nearly 30 years.

Investors worry that U.S. and European rate increases could derail global growth. Powell however, is optimistic. said it is “absolutely essential” that the Fed restore stable prices.

“We now anticipate the most aggressive and synchronized tightening cycle” by global central banks since the 1980s, saidIn a report, Jennifer McKeown from Capital Economics. “The key question now is not whether central banks will slam on the brakes, but what might stop them?”

The S&P 500 declined to 3,759.89. The index was evenly divided between gainers as well as decliners.

The Dow Jones Industrial Average lost 0.2% to 30483.13. The Nasdaq composite lost 0.2% to 11,053.08.

The S&P 500 is in a bear market, or down more than 20% from its Jan. 3 peak. It has fallen in 10 out of the 11 most recent weeks.

Fed policymakers predict more rate hikes in 2019 and 2020, and they expect them to happen at a faster pace than previously predicted. They expect the U.S. central banking’s key rate to reach 3.8% by 2023. This would be its highest level in 15 year.

In the United States, which is the world’s largest market, consumer sentiment has been eroded by rising prices. Retail spending is falling.

Inflation fears are aggravated by the spike in oil, wheat and other commodities caused by Russia’s attack upon Ukraine.

Oil prices fell sharply for the second consecutive day, suggesting that traders expect weaker demand as economic activity slows.

In electronic trading on New York Mercantile Exchange, Benchmark U.S. crude fell $2.26 to $103.93 a barrel. The contract fell $3.33 to $106.19. Brent crude, the price base for international trading, dropped $1.96 to $106.69 per barrel in London. It dropped $3.12 to $108.65 from the previous session.

The dollar fell to 135.39 from Wednesday’s 13.6.28 yen. The euro rose to $1.0570, from $1.0566.