BEIJING (AP) — Asian stock markets were mixed after signs of enduring upward pressure on American prices added to expectations of higher interest rates for longer.
Shanghai and Seoul advanced while Tokyo and Hong Kong declined. Oil prices edged higher.
Wall Street declined Wednesday after a survey showed prices paid by U.S. manufacturers rose in February for the first time in five months despite rate increases to cool economic activity and surging inflation.
That prompted traders to raise expectations of how high the Federal Reserve might hike rates and push back when cuts might start.
“Inflation expectations are climbing again,” said Brian Levitt of Invesco in a report. “The Fed pause may not be coming now until the middle of the year, at the earliest.”
Elsewhere, inflation in Germany, Europe’s biggest economy, held steady at 8.7% over a year earlier in February.
There are “very few to no signs of any disinflationary process outside of energy and commodity prices” despite rate hikes by the European Central Bank, said Carsten Brzeski of ING in a report.
The Shanghai Composite Index gained less than 0.1% to 3,313.29 while the Nikkei 225 in Tokyo shed 0.2% to 27,469.32. The Hang Seng in Hong Kong gave up 0.8% to 20,455.25.
The Kospi in Seoul rose 0.8% to 2,432.68 and Sydney’s S&P-ASX 200 was less than 0.1% higher at 7,255.00. New Zealand, Singapore and Bangkok declined while Jakarta gained.
On Wall Street, the benchmark S&P 500 lost 0.5% to 3,951.39. The Dow Jones Industrial Average edged up less than 0.1% to 32,661.84. The Nasdaq fell 0.7% to 11,379.48.
An industry group, the Institute for Supply Management, reported an index of prices paid by manufacturers rose 51.3 from January’s 44.5 on a 100-point scale on which numbers above 50 show an increase.
Some traders hoped the Fed might ease off rate increases as activity cooled and possibly start to cut by the end of this year. But those hopes have been dampened by signs inflation is sticking at high levels and warnings by Fed Chair Jerome Powell and other officials that rates will stay elevated for an extended period until price pressures are extinguished.
The Fed has raised its benchmark lending rate to 4.5% to 4.75% — from close to zero at the start of 2022 — in an effort to cool inflation to 2%.