Asian markets mixed in slow trading ahead of Fed meeting

TOKYO – Asian stocks were mixed in silent trading on Wednesday as many investors remained on the sidelines ahead of the US Federal Reserve meeting that will signal how aggressively it will fight inflation.

Japan’s Nikkei 225 NIK Index,
-0.35%
It fell 0.4% in morning trading, while South Korea’s Kospi Index fell 180,721,
-0.38%
It rose 0.2%. Hang Seng HSI in Hong Kong,
-0.15%
It added 0.3%, and the Shanghai SHCOMP Composite Index,
+ 0.22%
It rose 0.3%. Trading in Australia is closed for Australia Day. Singapore Standard Indicators STI,
+ 0.86%And
Taiwan Y9999,
-0.07%
and Indonesia JAKIDX,
-0.19%
rallied higher, while shares in Malaysia FBMKLCI slipped,
+ 0.65%.

Concerns about omicron remain throughout the region. In China, reported cases of COVID-19 have declined, but concerns remain, especially ahead of next week’s Lunar New Year holiday and the opening of the Beijing Olympics on February 4.

In Japan, the government has expanded a lot of restrictive measures in the country, which require restaurants to close early. But surveys show that people are responding more to increased case reports, not necessarily government actions.

On Wall Street, stocks fell well off their lows in the late afternoon. But another wave of selling in the last hour of trading pushed them lower again. Technology stocks were the biggest drag in the market.

S&P 500 SPX Index,
-1.22%
It fell 1.2% after falling as much as 2.8%. The benchmark index has been dropping steadily all month and is now 9.2% down from its Jan. 3 high.
-0.19%
Tech-heavy company Nasdaq slipped 0.2%.
-2.28%
He gave up 2.3%.

Rising inflation has put pressure on businesses and consumers, and the Fed is expected to struggle in 2022 by raising interest rates. Investors fear that the Fed could act too late or be too aggressive. The central bank releases its latest policy statement on Wednesday.

The virus pandemic continues to hovers over the economy and threatens to derail progress with each new wave. The International Monetary Fund cited the omicron variable as the reason for lowering its forecast for global economic growth this year.

A potential conflict between Russia and Ukraine threatens to push energy prices higher while forcing more countries to focus on fighting a war rather than inflation and COVID-19.

Barry Bannister, chief equity strategist at Stifel, said Wall Street is dealing with signs of slowing economic growth due to COVID-19 and the Federal Reserve really can’t back down from what it said it would do.

“The market has dealt with that and this is a big problem,” he said. “Fiscal and monetary tightening, together, are hard on financial assets when they are coming out of the naughty end of stimulus.”

However, the fact that major stock indexes came off their lowest levels today could be a sign that some investors are betting that the lackluster outlook for economic growth could prompt the Federal Reserve to take a more deliberate approach to raising interest rates.

“The weaker economic growth outlook has helped investors breathe a sigh of relief that the Fed will not be overly aggressive,” said Sam Stovall, chief investment analyst at CFRA.

In energy trading, the US crude benchmark CLH22,
-0.51%
It lost 26 cents to 85.34 dollars a barrel. Brent crude BRNH22,
-0.34%And
The international standard is 10 cents to $88.10 a barrel.

In currency trading, the US dollar USDJPY,
-0.02%
It was unchanged at 113.87 Japanese yen.

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