Asian Stocks Showing Mixed Responses Post Interest Rate Hike

Asian stock markets were mixed on August 4 after Wall Street fell for the third day in a row as a result of a British interest rate hike. Shanghai and Hong Kong made strides. Tokyo has withdrawn. Oil prices were volatile.

Wall Street's benchmark S&P 500 index fell 0.3% on Thursday after the Bank of England raised its main lending rate to a 15-year high and indicated it could remain there for some time.

Fitch Ratings cut its credit rating on US government debt a day earlier, 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," reported Edward Moya of Oanda.

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 able to raise more funds by selling bonds, easing debt controls imposed in 2020 that sent the industry into a tailspin. The Hong Kong Hang Seng rose 0.8% to 19,585.55, while Tokyo's Nikkei 225 fell 0.1% to 32,130.94. The Kospi in Seoul fell less than 0.1% to 2,604.49, while the S&P-ASX 200 in Sydney fell 0.2% to 7,296.80.

Hiring in the United States has been stronger than expected, prompting traders to push back the potential timeline for a recession and raise hopes that it will be milder than expected. However, strong hiring raises the possibility that the Fed will see it as adding to inflationary pressures and raise interest rates again.

The US government is scheduled to release an employment update on Friday. Fed Chair Jerome Powell has stated that this is one of the factors the US central bank considers when deciding on rate hikes.