Asian stocks mixed after Wall Street declines on growth worries

BEIJING –

After Wall Street fell, Asian stock markets were mixed after concerns that higher interest rates could dampen global economic growth.

Shanghai and Hong Kong grew, while Tokyo & Seoul fell. Oil prices dropped by more than US$2 per barrel to near $100

Federal Reserve Chair Jerome Powell speaking to members Congress said Wednesday that while the U.S. central bank doesn’t need to “provoke a recession,” one is a possibility due to rate hikes to cool inflation that is running at four-decade highs.

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 now accepts the risk of recession, having been in total denial,” Michael Every from Rabobank saidIn a report

The Shanghai Composite Index rose 0.6%, to 3,285.99, while the Nikkei225 in Tokyo fell 0.3% to 26,059.39. The Hang Seng in Hong Kong increased 1% to 21,209.09.

The Kospi in Seoul retreated 1.5% to 2,308.20 while Sydney’s S&P-ASX 200 rose 0.2% to 6,523.50. While Jakarta fell, New Zealand, Bangkok, and Singapore advanced.

Inflation is at an all-time high in Europe and the United States.

Investors are concerned that this could derail global growth. Powell acknowledged the risks before the Senate Banking Committee. 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 had equal shares of gainers and losers.

The Dow Jones Industrial Average fell 0.2% to 30,483.13. The Nasdaq composite fell 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. In the past 11 weeks, it has fallen in ten of its 11 week-long declines.

Last week, the Fed raised its benchmark interest rate by three quarters percent. This was three times its usual margin, and the largest increase in almost three decades.

Fed policymakers expect more rate increases this year and next, and at a faster pace that previously predicted. They predict that the central bank’s key interest rate will reach 3.8% by 2023, the highest level in 15-years.

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

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

Oil prices dropped sharply on Wednesday for the second consecutive day, suggesting that traders expect lower demand as economic activity slows down.

In electronic trading on New York Mercantile Exchange, benchmark U.S. crude fell $2.68 to $103.51 a barrel. The contract dropped $3.33 to $106.19 on Wednesday. Brent crude oil, which is the price basis for international trade, fell $2.43 to $106.22 per barrel in London. It dropped $3.12 to $108.65 from the previous session.

The dollar fell to 135.34 dollars from Wednesday’s 13.6.28 yen. The euro rose to $1.0570, from $1.0566.