Asian markets rise after Wall Street losses amid fears of recession

BEIJING—Asian stock markets rose Friday after Wall Street losses deepened as worries grow that the US economy is headed for recession.

Shanghai, Tokyo and Hong Kong advanced. Seoul declined. Oil prices gained.

Traders worry the Federal Reserve and other central banks might be willing to tip Western economies into recession as they try to extinguish inflation that is at multi-decade highs.

A Fed board member, Lael Brainard, and President Christine Lagarde of the European Central Bank in separate appearances Thursday affirmed plans to keep interest rates elevated despite market hopes central banks might scale back plans due to indications economic activity might be cooling.

“That again implies more hikes to come and then a long hiatus, not the imminent reversal markets are pricing for,” Rabobank said in a report.

The Shanghai Composite Index rose 0.6 percent to 3,260.04 and the Nikkei 225 in Tokyo gained less than 0.1 percent to 26,411.94. The Hang Seng in Hong Kong gained 0.9 percent to 21,844.98.

The Kospi in Seoul advanced 0.2 percent to 2,384.47 and Sydney’s S&P-ASX 200 was less than 0.1 percent higher at 7,439.50. New Zealand and Southeast Asian markets rose.

On Wall Street, the benchmark S&P 500 index lost 0.8 percent to 3,898.85 in its third daily decline.

More than 75 percent of the stocks in the S&P 500 closed lower.

Technology companies, retailers and industrial stocks were among the biggest drags. Chipmaker Nvidia fell 3.5 percent, Home Depot dropped 4 percent and Deere & Co. fell 4.1 percent.

The Dow Jones Industrial Average retreated 0.8 percent to 33,044.56. The tech-heavy Nasdaq tumbled 1 percent to 10,852.27.

Reports showed weakness in the US housing industry and manufacturing in the mid-Atlantic region, though they weren’t quite as bad as expected and the job market appears healthy.

They followed worse readings than expected Wednesday on retail sales, a cornerstone of the economy, and industrial production.

The Fed and central banks in Europe and Asia raised interest rates aggressively last year to cool inflation that is multi-decade highs in some economies.

Forecasters expect a US recession this year but say it likely will be brief.

The Fed’s key lending rate is 4.25 percent to 4.50 percent, up from close to zero one year ago.

Its next rate decision will be announced February 1. Investors expect an increase of 0.25 percentage points next month, smaller than previous hikes of up to 0.75 percentage points. zz

In energy markets, benchmark US crude advanced 40 cents to $81.01 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price benchmark for international oil trading, gained 32 cents to $86.48 per barrel in London.

The dollar gained to 128.76 yen from Thursday’s 128.44 yen. The euro edged up to $1.0836 from $1.0831. AP


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