Asian stocks traded mixed, and China’s markets were closed for holidays

TOKYO (AP) – Asian stocks were mixed on Wednesday after Wall Street indexes ended little changed as investors awaited earnings from major global companies.

Stocks rose in Tokyo and Seoul, but fell in Sydney and Mumbai. Markets in Hong Kong and Shanghai were closed for the Lunar New Year holidays.

Australia announced higher-than-expected inflation figures, quashing expectations of another rate hike. Consumer inflation rose 8.4% in December, above expectations of 7.6%. Yeap Jun Rong, market analyst at IG, said that boosted expectations of another 25 basis point hike from the RBA in February.

Japan’s Nikkei 225 Index rose 0.4% in afternoon trade, to 27,395.01. Australia’s S&P/ASX 200 fell 0.3% to 7,468.30, while South Korea’s Kospi Index jumped 1.4% to 2,428.62. Sensex in Mumbai lost 1.1%.

On Wall Street, the S&P 500 fell less than 0.1% to 4,016.95, its second loss in three trading days. The Dow Jones Industrial Average rose 0.3% to 33733.96 and the Nasdaq Composite fell 0.3% to 11334.27. Small cap stocks were also lower, with the Russell 2000 index down 0.3%, ending at 1,885.61.

Stocks have been volatile as investors try to get a better idea of ​​how inflation is affecting the economy, the possibility of a recession, and whether the Federal Reserve can mitigate its steep rate hikes.

The latest batch of earnings shows that companies are still grappling with the effects of inflation on consumers and supply chains.

The bond fell after it was issued, and industrial coatings maker 3M fell 6.2% in the biggest drop among S&P 500 stocks after reporting weak fourth-quarter earnings and announcing job cuts. It is the latest company to announce layoffs as consumers succumb to inflation and concerns grow about a deeper decline in spending and a potential recession.

Union Pacific fell 3.3% after reporting disappointing earnings and revenue.

Microsoft rose 4% in after-hours trading after the software and technology giant reported earnings that beat Wall Street expectations. It closed down 0.2% in regular trading.

More than a dozen companies have been temporarily halted trading on the New York Stock Exchange after an apparent technical problem caused wide fluctuations in their stock prices as the market opened. Stocks in Morgan Stanley, Wells Fargo, AT&T and other companies moved sharply at the open, bringing trading to a halt. Prices were corrected after trading resumed. The NYSE said it was investigating “reported issues” after restoring all systems.

Markets were swinging between hope and caution as investors watched whether the Federal Reserve would adjust its anti-inflationary strategy. The central bank actually pulled its key overnight rate to a range of 4.25% to 4.5% from almost zero early last year.

The Fed will announce its next rate hike on February 1 and traders expect a quarter-point increase, marking a softening in the central bank’s pace.

“Where is the market and the Fed so violently sparring right now, how long are they going to leave interest rates at around 5%?” said Scott Ladner, chief investment officer at Horizon Investments.

Long-term bond yields fell. The yield on 10-year Treasury notes, which affects mortgage rates, fell to 3.46% from 3.52% late Monday.

Wall Street will receive some economic updates this week that could provide more insight into the impact of inflation.

The government will release fourth quarter GDP data on Thursday. Economists expect growth of less than 1%, down from 1.9% in the third quarter, and contraction through the first half of 2022. Investors will get more updates on personal spending and income on Friday.

In energy trading, US benchmark crude rose 26 cents to $80.39 a barrel in electronic trading on the New York Mercantile Exchange. It settled down 1.8% overnight. Brent crude, the international pricing benchmark, rose 36 cents to $86.49 a barrel.

In currency trading, the US dollar rose to 130.33 yen from 130.18 yen. The price of the euro reached 1.0905 dollars, a slight increase from 1.0889 dollars.


Yuri Kageyama on Twitter

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