Asian stocks mixed after Wall Street slips, China virus fears

Asian stock markets were mixed on Tuesday after Wall Street fell and Chinese antivirus controls stoked concerns about an economic slowdown.

Shanghai and Tokyo rose while Hong Kong fell. oil prices have risen.

Wall Street’s benchmark S&P 500 index fell for another day after a Federal Reserve official unsettled investors last week by saying already-high interest rates might need to rise higher-than-expected to halt rising inflation.

China’s increasing restrictions on millions of people in several cities to combat virus outbreaks are adding to concerns that the world’s second-largest economy could be weakening.

“Fears about China’s COVID situation are putting pressure on the global demand outlook,” ActivTrades’ Anderson Alves said in a report. “Positioning for a move higher in Chinese stocks will have to wait longer.”

The Shanghai Composite Index rose 0.6% to 3,104.44 and Tokyo’s Nikkei 225 rose 0.7% to 28,130.26. Hong Kong’s Hang Seng fell 0.7% to 17,523.71.

Seoul’s Kospi lost 0.5% to 2,406.79, while Sydney’s S&P ASX 200 gained 0.6% to 7,184.10.

India’s Sensex opened up 0.3% to 61,316.19. New Zealand and Jakarta declined while Southeast Asian markets rose.

On Wall Street, the S&P 500 fell 0.4% to 3,949.94. The tech-stock-dominated Nasdaq Composite fell 1.1% to 11,024.51.

The Dow Jones Industrial Average fell 0.1% to 33,700.28. It was helped by a 6.3% gain for Disney after the company announced that former CEO Bob Iger was returning to the job.

Apple slipped 2.2% and Visa fell 2.1%.

Tesla plunged 6.8% after briefly hitting a two-year intraday low. Shares of the electric-car maker have fallen more than 50% this year amid fears that CEO Elon Musk will be distracted from Twitter by his $44 billion purchase.

Consumer and energy stocks also declined. Target fell 3% and Exxon Mobil fell 1.4%.

Concerns about China’s economic activity mounted after major cities of Guangdong and Shijiazhuang ordered millions of residents to stay home and other cities, including the capital Beijing, closed shops and tightened restrictions on travel and other activities.

China’s ruling Communist Party pledged this month to reduce the economic impact of its “zero-COVID” strategy, which aims to isolate every case, by changing quarantine and other rules. However, a surge in cases poses a challenge as cities close businesses or order factory operators to isolate their workforce from contact with outsiders.

Casino operator Wynn Resorts, which depends on Chinese players visiting Macau’s southern territory for a large portion of its revenue, fell 2.2%. Las Vegas Sands, which also operates casinos in Macau, contributes 2.9%.

Bond yields fell. The 10-year Treasury yield, which drives mortgage rates, slipped to 3.82% from 3.83% late Friday.

US markets close Thursday for the Thanksgiving holiday and have a shortened trading day on Friday.

On Wednesday, the Fed will release minutes from its latest meeting, which could potentially give investors more insight into plans to combat inflation, which is near a four-decade high.

Traders fear unusually large rate hikes by the Fed and other central banks this year could plunge the global economy into recession.

They expect the Fed to hike rates again at its December meeting, but by half a percentage point after four hikes of 0.75 percentage points, three times the usual range.

St. Louis Federal Reserve Bank President James Bullard dashed hopes that the Fed could ease its rate hike plans. He suggested that the US Federal Reserve’s interest rate might need to rise to between 5% and 7% before inflation is under control. That would be nearly double the current range of 3.75% to 4%, which rose from near zero in March.

In energy markets, U.S. crude, the benchmark in electronic trading on the New York Mercantile Exchange, gained 27 cents to $80.31 a barrel. Brent crude, the price basis for international oil trading, rose 42 cents to $87.87 a barrel in London.

The dollar fell to 141.78 yen from 142.17 yen on Monday. The euro fell from $1.0240 to $1.0235.

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