Asian stocks were mixed after the Fed said it was ready to act on inflation

BEIJING – Asian stock markets were mixed on Thursday after Federal Reserve officials indicated they are ready to raise interest rates sooner than expected if needed to cool inflation.

Shanghai and Seoul retreated while Tokyo, Hong Kong and Sydney advanced.

Wall Street’s benchmark S&P 500 index rose 0.2% before markets closed for a holiday in the United States. They reopen Friday for a shortened trading session.

Federal Reserve officials said at their policy meeting in October that they “will not hesitate” to respond to inflation, according to notes released Wednesday. They predicted that interest rates could be raised “sooner than participants currently anticipated”.

This raised investor fears that the Fed and other central banks might feel pressure to withdraw the economic stimulus that has been boosting stock prices. Fed officials have indicated earlier that they may raise interest rates late next year.

Rising prices combined with stronger employment in the US suggest the situation at the upcoming Federal Reserve meeting could be “unabashedly tougher,” said Tan Boon Heng of Mizuho Bank in a report.

The Shanghai Composite Index fell 0.1% to 3,589.18 while the Nikkei 225 in Tokyo rose 0.7% to 2,9515.72. Hong Kong’s Hang Seng advanced 0.1% to 24,714.83.

The Kospi Index in Seoul lost 0.4% to 2,981.12 after the Central Bank of Korea raised its benchmark interest rate by 0.25 percentage point to 1%, in line with expectations.

Sydney’s S&P-ASX 200 rose less than 0.1% at 7,403.60, and India’s Sensex opened less than 0.1% at 58,337.48. New Zealand and Jakarta advanced while Singapore retreated. Bangkok has not changed.

On Wall Street, the S&P 500 rose to 4,701.46. Gains in technology, real estate and energy stocks outpaced slides in banks and materials companies.

The Dow Jones Industrial Average fell less than 0.1% to 3,5804.38. The Nasdaq Composite Index rose 0.4% to 15,845.23.

Fed notes showed that officials still believed that this year’s rise in inflation was likely to be temporary, but acknowledged that prices rose more than expected.

The notes covered the October meeting at which Fed board members voted to take the first steps to roll back concessional credit and other measures to support the economic recovery from the coronavirus pandemic.

A wide range of industries have been under pressure from inflation and interruptions in supplies of raw materials and components. Forecasters worry that consumers may cut back on spending if retail prices continue to rise.

Consumer spending rose 1.3% in October, just over double the rise in the previous month, according to the Commerce Department.

The Labor Department reported that the number of Americans filing for unemployment benefits fell last week to its lowest level in more than half a century.

In energy markets, US crude lost 9 cents to $78.30 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used in global oil pricing, rose two years to $81.07 a barrel in London.

The dollar fell to 115.37 yen from 115.48 yen. The euro advanced to $1.1217 from $1.1199.

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