Asian stocks mixed as investors await U.S. profits, inflation

BEIJING –

Asian stock markets were mixed Tuesday as investors waited on U.S. Inflation data amid uncertainty about higher interest rate, Chinese efforts to contain coronavirus epidemics and Russia’s war in Ukraine.

Shanghai and Hong Kong grew while Tokyo and Seoul declined. Oil prices rose more that US$3 per barrel.

Wall Street’s benchmark S&P 500 index slid 1.7% on Monday as investors waited for a new round of corporate results to see how profits are affected by inflation that is at a four-decade high.

The Federal Reserve and other central bank plans to attempt to reduce inflation by lowering ultra-low interest rates are causing concern in the markets. Anxiety has been increased by Russia’s attack against Ukraine and China closing down all businesses in Shanghai (its commercial capital) to combat coronavirus epidemics.

“Worries linger about the COVID-19 situation,”Anderson Alves, ActivTrades, said this in a report. “Markets are eyeing the situation in Ukraine for signs that could trigger further risk-off price action.”

After authorities announced that they would relax anti-coronavirus controls, which had shut down most businesses in China’s largest city and disrupted manufacturing, the Shanghai Composite Index rose 1.5% to 3,213.33.

The Hang Seng in Hong Kong increased 0.9% to 21,400.40. While the Nikkei225 Tokyo dropped 1.8% to 26,334.98.

The Kospi in Seoul gave up 1% to 2,666.76 and Sydney’s S&P-ASX 200 retreated 0.4% to 7,454.00.

India’s Sensex closed 0.8% lower at 58 476.81. New Zealand and Southeast Asian markets fell.

Later Tuesday, U.S. Labor Department was scheduled to report March consumer price data.

Investors are concerned that inflation could be strong enough to encourage consumers not to spend as much, which would likely lead to a slower economic recovery than expected.

On Monday, the S&P 500 fell to 4,412.53 as all sectors in the index declined. The Dow Jones Industrial Average declined 1.2% to 34.308.08. The Nasdaq dropped 2.2% to 13,411.96

Microsoft dropped 3.9%, while Apple lost 2.6%.

Investors expect a more aggressive shift by the Federal Reserve to curb rising inflation. Already, the central banking has announced a quarter percentage point increase in its key rate.

Fed officials indicated in minutes from last month’s meeting they were considering raising the U.S. benchmark rate by double the normal amount at upcoming meetings. They also indicated they would shrink the Fed’s bond holdings, which would push up long-term borrowing rates.

Oil prices have fallen on the back of lower Chinese demand. This was after many businesses in Shanghai were shut down, and other industrial centers were placed under control to stop coronavirus epidemics. Last month, prices rose to $130 per barrel due to fears about Russian supply disruptions.

China’s automakers and other manufacturers are cutting back production after authorities tightened restrictions in response to coronavirus outbreaks in Shanghai, Shanghai, and other cities.

Benchmark U.S. crude rose $3.07 to $97.36 per barrel in electronic trading on New York Mercantile Exchange. The contract dropped $3.97 to $94.29. Brent crude, which is the price basis for international oil trading in London, increased $3.03 to $101.51 per barrel. It was $98.48 at the end of the previous session, down $4.30.

The dollar rose to 125.59 Japanese dollars, compared to Monday’s 125.46 Japanese won. The euro dropped to $1.0859 from $1.0890.