Asian stock markets fell on Thursday ahead of a U.S. inflation update that investors say will bolster the Federal Reserve’s plans for more aggressive interest rate hikes.
Shanghai, Tokyo, Hong Kong and Seoul. Oil prices fell slightly.
Wall Street’s benchmark S&P 500 index ended lower on Wednesday after a producer price gauge dipped slightly but was still near a multi-decade high.
The most watched consumer price index was due to be released on Thursday.
“A hawkish reaction to the data could add more pressure on stocks,” ActivTrades’ Anderson Alves said in a report.
The Fed and other central banks in Europe and Asia have hiked rates by unusually wide margins to quell inflation that is at its highest in decades, but traders fear it could tip the global economy in the recession.
The Shanghai Composite Index lost 0.3% to 3,015.58 and the Nikkei 225 in Tokyo fell 0.5% to 26,260.25. Hong Kong’s Hang Seng fell 1.2% to 16,507.09.
Seoul’s Kospi fell 1.2% to 2,176.91 while Sydney’s S&P-ASX 200 gained 0.2% to 6,660.20.
On Wall Street, the S&P 500 fell 0.3% to 3,577.03 for its sixth consecutive daily decline after a report showed that inflation in the price of raw materials and other inputs for producers was very high.
Prices rose 8.5% in September, down from a high of 11.7% reached in March. But prices rose 0.4% from August after two months of decline.
The government is due to report consumer inflation on Thursday and retail sales on Friday. Both could give a clearer picture of where prices are hottest and how consumers are reacting.
The S&P 500 is down 25% year-to-date and near a two-year low.
The Dow Jones Industrial Average slipped 0.1% to 29,210.85. The Nasdaq composite lost 0.1% to 10,417.10. Both are on pace for a weekly loss.
Minutes from the Fed’s latest interest rate policy meeting, released on Wednesday, underscored the central bank’s commitment to tackling “unacceptably high” inflation.
Also on Wednesday, the pound weakened against the US dollar after Bank of England Governor Andrew Bailey confirmed that the bank would not extend a contingency purchase plan beyond Friday. debt introduced last month to stabilize financial markets.
The US dollar exchange rate rose against other currencies on Fed rate hikes and recession fears.
The yen fell further to 146.83 to the dollar after hitting a 24-year low of 145.85 on Wednesday.
Raising expectations Japan’s central bank may intervene again to support the yen’s exchange rate after an earlier intervention in September.
In energy markets, benchmark U.S. crude fell 18 cents to $87.09 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oil trade, fell 4 cents to $92.41 a barrel in London.
The euro fell from 97.06 cents to 96.99 cents.
This story was originally published October 12, 2022 12:23 a.m.