Asian stocks mixed before Fed meeting after China cuts rate

BEIJING (AP) — Asian stock markets were mixed Monday after China cut an interest rate that affects mortgage lending while investors looked ahead to this week’s Federal Reserve conference for signals about more possible U.S. rate hikes to cool surging inflation.

Shanghai advanced after the Chinese central bank nudged down its target rate for a five-year loan to shore up weak housing sales. Tokyo and Hong Kong declined. Oil prices rose nearly $1 per barrel.

Investors are watching the annual Fed meeting in Jackson Hole, Wyoming, for rates guidance after minutes last week from the U.S. central bank’s July board meeting affirmed plans for more increases despite signs of weaker economic activity.

Traders worry aggressive rate hikes this year by the Fed and central banks in Europe and Asia to contain inflation that is running at multi-decade highs might derail global economic growth.

“The Fed is still feeling inflation. Its actions have not even begun to dent inflationary pressures at all,” said Clifford Bennett of ACY Securities in a report. “Nor have they begun to crimp economic activity at all. The economic slowdown was already in play for other reasons.”

The Shanghai Composite Index rose 0.4% to 3,270.59 while the Nikkei 225 in Tokyo sank 0.4% to 28,805.52. The Hang Seng in Hong Kong shed less than 0.1% to 19,770.92.

The Kospi in South Korea gave up 0.7% to 2,475.35 and Sydney’s S&P ASX-200 fell 0.8% to 7,060.20. New Zealand and Singapore advanced while Indonesia declined.

On Wall Street, the benchmark S&P 500 lost 1.3% on Friday, wiping out gains earlier in the week.

The S&P fell to 4,227.48, ending down 1.2% for the week. It is down 11.3% this year.

The Dow Jones Industrial Average dropped 0.9% to 33,706.74. The Nasdaq composite lost 2% to 12,705.22.

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