By JOE McDONALD
BEIJING (AP) — Asian stock markets rose Thursday after China cut interest rates to support sluggish economic growth and Japan reported a double-digit rise in exports.
Benchmarks in Shanghai, Tokyo, Hong Kong and Seoul advanced.
On Wall Street, the benchmark S&P 500 fell 1% on Wednesday as investors tried to gauge how quickly the Federal Reserve would roll back economic stimulus to calm inflation.
China’s central bank cut rates on one- and five-year loans after growth in the world’s second-largest economy slumped to 4% year on year in the last quarter following a clampdown on mounting debt on banks. real estate agents.
“The question remains whether banks will respond by increasing lending,” ING’s Iris Pang said in a report. Amid uncertainty over heavily indebted developers, Pang said, “banks will be picky about who they lend to.”
The Shanghai Composite Index rose 0.1% to 3,563.11 and the Hang Seng in Hong Kong rose 1.8% to 24,570.06.
The Nikkei 225 in Tokyo gained 0.4% to 27,574.43 after December exports rose 17.5% from a year earlier. Auto export growth accelerated to 17.5% from 4.1% in November.
Seoul’s Kospi added less than 0.1% to 2,844.72 while Sydney’s S&P ASX 200 lost less than 0.1% to 7,329.00. New Zealand and Bangkok fell while Singapore and Jakarta advanced.
On Wall Street, the S&P 500 fell to 4,532.76 after a sell-off in tech stocks. The Dow Jones Industrial Average fell 1% to 35,028.65.
Apple lost 2.1% and chipmaker Nvidia fell 3.2%. The S&P 500 technology sector has fallen more than 8% this year.
The Nasdaq composite, dominated by tech stocks, fell 1.1% to 14,340.26. The index is 10.7% below its all-time high on Nov. 19.
The market “has succumbed to renewed inflation/Fed tightening fears,” Mizuho Bank’s Vishnu Varathan said in a statement.
Stocks have fallen since Fed officials said in mid-December that it planned to scale back bond purchases and that other stimulus measures that are pushing stock prices higher would be accelerated due to the surge in US inflation to its highest level in four decades.
As of late Tuesday, investors were pricing in a greater than 86% chance that the Fed would raise short-term rates at its March meeting, according to CME Group. That’s up from 47% a month ago.
On Wednesday, President Joe Biden called on the Fed to do more to fight inflation.
“Given the strength of our economy and the pace of recent price increases, it is important to recalibrate the support that is now needed,” Biden said at a press conference.
Investors are watching the latest round of corporate earnings for signs that inflation could squeeze earnings.
Home and consumer goods company Procter & Gamble rose 3.4% after posting strong financial results. The company said consumers were willing to pay higher prices for dishwashing detergent, diapers and other products.
In energy markets, benchmark U.S. crude fell 16 cents to $85.64 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, fell 24 cents to $88.20 a barrel in London.
The dollar rose slightly to 114.27 yen from 114.25 yen on Wednesday. The euro fell from $1.1351 to $1.1356.