BEIJING – Asian stocks markets were mixed Friday after Wall Street sank for a third day following a British interest rate hike.
Shanghai and Hong Kong advanced. Tokyo retreated. Oil prices were mixed.
Wall Street's benchmark S&P 500 index fell 0.3% after the Bank of England on Thursday raised its main lending rate to a 15-year high and indicated it could stay high for a while.
Investors were rattled a day earlier after Fitch Ratings cut its credit rating on U.S. government debt, despite analyst comments that the change made little difference.
“Wall Street is watching a global bond market selloff get uglier as U.S. stocks waver,” said Edward Moya of Oanda in a report.
The Shanghai Composite Index rose 0.1% to 3,284.82 after China's new central bank governor met with real estate developers and said they would be allowed to raise more money by selling bonds, further easing debt controls imposed in 2020 that sent the industry into a tailspin.
The Hang Seng in Hong Kong gained 0.8% to 19,585.55 while the Nikkei 225 in Tokyo lost 0.1% to 32,130.94.
The Kospi in Seoul declined less than 0.1% to 2,604.49 and Sydney's S&P-ASX 200 shed 0.2% to 7,296.80.
On Wall Street, the S&P fell to 4,501.89 a day after its biggest one-day decline in four months.
The Dow Jones Industrial Average lost 0.2% to 35,215.89 and the Nasdaq composite dipped 0.1% to 13,959.72.
Investors are watching whether the U.S. economy can avoid a recession following repeated rate hikes over the past year to cool inflation.
The Bank of England warned it was too early to declare its cycle of rate hikes ended because some risks from inflation including higher wages had “begun to crystallize.” The bank said inflation is forecast to drop to 4.9% by the end of the year, but that is more than double its 2% target.
“I don’t think it’s time to declare that it’s all over," said the BOE governor, Andrew Bailey.
U.S. hiring has been stronger than expected, prompting traders to push back the possible timeline for a recession and raised hopes it might be less severe than expected. However, strong hiring also raises the chances the Fed might see that as adding to upward pressure on inflation and raise interest rates again.
The U.S. government is due to issue an update on employment Friday. Fed Chair Jerome Powell has cited that as one factor the U.S. central bank is watching when deciding on rate hikes.
Critics say a consensus has formed too quickly on Wall Street that inflation will continue to moderate and that the Fed can not only halt its hikes to rates but even begin cutting them early next year.
Treasury yields in the bond market marched higher on Thursday, drawing money out of stocks.
The yield on the 10-year Treasury, or the difference between the day's market price and the payout at maturity, rose to 4.18% from 4.09% late Wednesday. It is up from 2.75% a year ago.
Qualcomm, a maker of processor chips for smartphones and other devices, tumbled 8.2% for one of the larger losses in the S&P 500. It reported weaker revenue for the spring than expected, even though its profit topped forecasts.
On the winning side was cleaning products maker Clorox, which jumped 9%. It reported stronger profit and revenue than analysts expected.
Exxon Mobil gained 1.7%. They benefited as crude prices rallied after Saudi Arabia said it will keep in place cuts to production meant to boost oil's price.
Two hugely influential companies reported their results after trading ended for the day.
Apple and Amazon are two of the largest companies on Wall Street by market value, which gives their stock movements more heft on the S&P 500 and other indexes.
They also both soared more than 45% this year on expectations of continued growth. That means pressure on them to deliver big results to justify the big stock gains.
In energy markets, benchmark U.S. crude gained 15 cents to $81.70 per barrel in electronic trading on the New York Mercantile Exchange. The contract surged $2.06 on Thursday to $81.55. Brent crude, the price basis for international oils, added 9 cents to $85.23 per barrel in London. It advanced $1.94 the previous session to $85.14.
The dollar fell to 142.54 yen from Thursday's 142.71 yen. The euro gained to $1.0957 from $1.0942.