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Asian stocks follow Wall Street ahead of likely US interest rate hike

Asian stocks follow Wall Street ahead of likely US interest rate hike
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BEIJING (AP) – Asian stock markets trailed Wall Street’s lower course on Wednesday as traders braced for a possible sharp hike in interest rates by the Federal Reserve to cool inflation.

Shanghai, Hong Kong and South Korea declined. Tokyo advanced. Oil prices were little changed, staying below $100 a barrel.

Wall Street plummeted on Tuesday after Walmart warned that inflation, which has risen to a four-decade high of 9.1%, is hurting American consumer spending.

The Fed is expected to announce a rate hike of up to three-quarters of a percentage point on Wednesday, triple its usual range. That would match a similar increase over the past month, the Fed’s largest in 28 years.

Investors fear aggressive anti-inflation measures by the Fed and central banks in Europe and Asia could hurt global economic growth.

“The main risk at this stage is indeed inflationary ‘overkill’ with too abrupt monetary tightening, unnecessarily pushing up the unemployment rate,” Pictet Wealth Management’s Thomas Costerg said in a report. Thomas said most economic indicators and lower commodity prices are already pointing to slower inflation.

The Shanghai Composite Index slipped 0.1% to 3,273.32, while Tokyo’s Nikkei 225 rose 0.1% to 27,692.89. Hong Kong’s Hang Seng fell 1.5% to 20,598.58.

Seoul’s Kospi was down 0.6% to 2,398.48 and Sydney’s S&P ASX 200 was down 0.1% to 6,798.20.

New Zealand rose while Southeast Asian markets declined.

On Wall Street, the benchmark S&P 500 fell 1.2% to 3,921.05. The Dow Jones Industrial Average fell 0.7% to 31,761.54. The Nasdaq Composite closed 1.9% lower at 11,562.57.

Walmart tumbled 7.6% after the retail giant cut its second-quarter and full-year earnings outlook late Tuesday. Rising food and gas prices are forcing shoppers to cut back on more profitable items, especially clothing.

that of the dealer profit warning mid-quarter are rare and worries about how the highest inflation in 40 years is affecting the overall retail sector.

Other large chains also fell. Target fell 3.6%, Macy’s 7.2% and Kohl’s 9.1%.

Tech stocks fell. Microsoft fell 2.7%, Amazon 5.2% and Facebook owner Meta Platforms 4.5%.

General Motors then fell 3.4% its second-quarter profit fell 40% from a year ago. U.S. sales fell 15% after the company was unable to ship 95,000 vehicles in the quarter due to shortages of processor chips and other components.

In energy markets, the reference price for US crude rose 30 cents to $95.28 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.72 to $94.98 on Tuesday. Brent crude, the price base for international oils, rose 5 cents to $99.51 a barrel in London.

The dollar rose to 136.97 yen from 136.00 yen on Tuesday. The euro rose to $1.0145 from $1.0120.

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