BEIJING, Jan. 10 (BNA): Asian stock markets were mixed on Monday after Wall Street plunged on fears that the Federal Reserve will raise interest rates as soon as March.
Shanghai and Hong Kong advanced. Seoul and Sydney refused. Japanese markets are closed for a holiday.
Investors were shaken last week after notes from the Federal Reserve’s latest meeting showed that officials believe the US labor market is so healthy that it may no longer need ultra-low interest rates and other stimulus.
This was reinforced by Friday’s US employment numbers which showed stronger-than-expected wages, although there was only about half employment as expected.
The possibility of an early rate hike “indicates that markets may continue to be affected by volatility,” Tan Boon Hing of Mizuho Bank said in a report.
The Shanghai Composite rose 0.2% to 3587.69 and Hong Kong’s Hang Seng advanced 0.9% to 23702.90.
Seoul’s Kospi fell 1.2% to 2,919.46 and Sydney’s S&P ASX 200 lost 0.1% to 7,444.70.
Investors were cautious after Federal Reserve officials said in December that plans to cut ultra-low interest rates and other economic stimulus that have boosted stock prices could accelerate to cool US inflation now at its highest level in four decades.
On Friday, Wall Street’s benchmark S&P 500 fell 0.4% to 4,677.03, or about 2.5% below its record high on Jan. 3.
The Dow Jones Industrial Average fell less than 0.1% to 36,231.66. The Nasdaq Composite Index fell 1% to 14935.90.
Investors are pricing in a better than 79% probability that the Fed will raise short-term interest rates in March. A month ago, they saw less than a 39% chance of that, according to CME Group.
Record-low interest rates have helped boost stock prices despite bouts of anxiety over the coronavirus pandemic.
The Fed has already slowed the bond purchases that have been pumping money into the financial system to lower commercial lending rates. Notes from the December meeting indicated that Fed officials may cut such purchases more quickly than previously planned.
In energy markets, benchmark US crude rose 17 cents to $79.07 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 56 cents on Friday to $78.90. Brent crude, used in global oil pricing, rose 20 cents to $81.95 a barrel in London. It lost 24 cents in the previous session to $81.75.
The dollar rose to 115.79 yen from 115.56 yen on Friday. The euro fell to $1.1337 from $1.1362.
HF