Asian stocks higher after Fed says rate hikes may be needed
BEIJING (AP) — Asian stock markets gained Thursday after the Federal Reserve said higher U.S. interest rates might be needed to cool inflation.
Shanghai, Tokyo and Sydney advanced. Hong Kong declined. Oil prices edged higher after falling below $100 per barrel this week.
Wall Street's benchmark S&P 500 index gained 0.4% on Wednesday after notes from the latest Fed meeting said “an even more restrictive stance could be appropriate" to get inflation back to its 2% target. Fed officials acknowledged that could weaken the economy.
Investors worry aggressive U.S. and European rate hikes to contain prices rises that are running at a four-decade high might depress global economic activity.
“Stocks rose because runaway commodity and oil prices are sinking,” said Stephen Innes of SPI Asset Management. “Both are the critical targets Fed policy is engineered to tame; hence, inflation expectation is coming under control.”
The Shanghai Composite Index rose 0.5% to 3,372.42 and the Nikkei 225 in Tokyo gained 1.1% to 26,399.23. The Hang Seng in Hong Kong lost 0.4% to 21,498.91.
The Kospi in Seoul climbed 2.1% to 2,340.03 and Sydney's S&P-ASX 200 was up 0.4% to 6,618.90.
India's Sensex opened up 0.6% at 54,089.,79. New Zealand declined while Southeast Asian markets advanced.
On Wall Street, the S&P 500 rose to 3,845.08. The The Dow Jones Industrial Average gained 0.2% to 31,037.68. The Nasdaq composite added 0.3% to 11,361.85.
The Fed last month raised its key interest rate by three-quarters of a point to a range of 1.5% to 1.75%, the biggest single increase in nearly three decades. Chair Jerome Powell suggested at that time a rate hike of one-half or three-quarters of a point, three times the Fed's usual margin, was likely when policymakers meet late this month.
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