BEIJING — Asian stock markets rose on Friday after Wall Street edged closer to bearish territory, China cut a key interest rate and Japanese inflation rose slightly.
Market benchmarks in Shanghai, Tokyo, Hong Kong and Sydney grew. Oil prices lost more than $1 a barrel.
Wall Street’s benchmark S&P 500 lost 0.6% on Thursday as rising interest rates, Russia’s war on Ukraine and China’s economic slowdown added to investor unease. The benchmark is down 18.7% from its January high and close to the 20% drop that defines a bear market.
“This is unlikely to be the bottom, given the tightening of financial conditions ahead,” Mizuho Bank’s Tan Boon Heng said in a statement. “Reality may again be harsher than expected.”
The Shanghai Composite Index rose 1.2% to 3,134.24 after China’s central bank cut its rate on a five-year loan, which would bolster weak home sales by lowering mortgage costs. The one-year lending rate that affects commercial borrowers remained unchanged.
That suggests Beijing is “trying to maintain targeted easing and we shouldn’t expect large-scale stimulus,” Capital Economics’ Julian Evans-Pritchard said in a report.
The Nikkei 225 in Tokyo jumped 1.3% to 26,742.67 after Japanese consumer inflation hit 2.5% in April from 1.3% the previous month. It was the first time since 2008 that inflation exceeded the central bank’s 2% target.
Core inflation, which excludes fresh food and energy, hit a seven-year high of 2.1% from 0.8% in March. Even so, economists say the central bank is unlikely to change interest rates due to the weak economy, which contracted last quarter.
The Hang Seng in Hong Kong gained 2% to 20,532.39 and the Kospi in Seoul rose 1.8% to 2,638.28. Sydney’s S&P-ASX 200 added 1.1% to 7,139.60.
The Indian Sensex opened 2.1% higher at 53,920.39. New Zealand and Southeast Asian markets also grew.
On Wall Street, the S&P 500 fell to 3,900.79. The Dow Jones Industrial Average fell 0.8% to 31,253.13. The Nasdaq slipped 0.3% to 11,388.50.
Investors are watching the Federal Reserve for hints of further interest rate hikes to quell inflation that is at its highest level in four decades. Fed Chairman Jerome Powell said this week that the US central bank may take more aggressive action if price pressures do not ease.
Traders are also worried about China’s economy after official data showed factory and consumer activity in April was weaker than expected after Shanghai and other industrial hubs were shut down to fight the coronavirus outbreaks. coronavirus outbreaks.
U.S. tech stocks fell on Thursday, accounting for much of the S&P 500’s decline.
Cisco Systems fell 13.7% after the router and switch vendor cut its profit forecast amid supply chain constraints. Synopsis jumped 10.3% after the software company raised its financial forecast for the year.
Retailers and other businesses that rely on direct consumer spending have mostly grown. Amazon added 0.2% and Expedia climbed 5.3%.
In energy markets, benchmark U.S. crude fell $1.05 to $108.84 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.62 on Thursday to $112.21. Brent crude, the price basis for international oil trade, fell 84 cents to $111.20 a barrel in London. It gained $2.93 the previous session at $112.04.
The dollar fell slightly to 127.70 yen from 127.74 yen on Thursday. The euro fell from $1.0598 to $1.0580.