BEIJING (AP) — Asian stock markets followed Wall Street lower Thursday after the Federal Reserve said U.S. inflation is too high, suggesting support for more aggressive interest rate hikes.
Shanghai, Tokyo, Hong Kong and Sydney declined. Oil prices edged higher.
Wall Street’s benchmark S&P 500 index lost 0.7% on Wednesday, ending a three-day series of rises, after notes from the Fed’s July 26-27 board meeting showed members thought inflation still is “unacceptably high” despite signs U.S. economic growth is weakening. It said the board saw “little evidence” inflation pressures are subsiding.
Investors worry aggressive rate hikes by the Fed and central banks in Europe and Asia to tame inflation that is running at multi-decade highs might derail global economic growth.
The Fed notes raised “the prospects of further tightening” even if the pace of hikes slows, while other investors see possible “excessive tightening dragging growth,” said Venkateswaran Lavanya of Mizuho Bank in a report.
New Zealand and Bangkok declined while Singapore and Jakarta advanced.
On Wall Street, the S&P 500
fell to 4,274.04. The loss wiped out the week’s gains and left the index down 0.1% since Monday.
The Commerce Department reported July retail sales were flat compared with the previous month, defying predictions of a slight increase. Retailers have warned high inflation will discourage consumers from spending on non-essentials.
Retail chain Target
fell 2.7% after reporting a nearly 90% plunge in second quarter profits. Children’s clothing and accessories chain Children’s Place
fell 11% after reporting a surprise loss due to supply problems and pressure from inflation.
Technology and communications stocks also fell.
The Fed notes Wednesday made clear the board plans to keep raising interest rates but gave no indication when or by how much.
The U.S. central bank has hiked its benchmark lending rate twice this year by 0.75 percentage points, triple its usual margin. Forecasters say another hike of the same size is possible at the Fed’s September meeting, though the likelihood has declined as data show the economy weakening.
In energy markets, benchmark U.S. crude rose 17 cents to $88.28 per barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.58 to $88.11 on Wednesday. Brent crude
the price basis for international trading, gained 9 cents to $93.74 per barrel in London. It surged $1.31 the previous session to $93.65.