Asian Stocks Mixed After Wall Street Rebound - AP News

Bangkok, Dec 22 (AP) Shares were mostly higher in Asia on Friday after several strong profit reports helped Wall Street claw back most of its sharp losses from day before.

Benchmarks fell in Hong Kong, Shanghai, Sydney and Bangkok but rose in Tokyo and Mumbai. US futures fell while oil prices advanced.

Japan's core inflation rate fell to 2.5 per cent in November from 2.9 per cent a month earlier as energy costs eased, the government reported. The decline, if it augurs further weakening of prices, might counter expectations that the central bank will tighten its lax monetary policy in coming months.

Bank of Japan officials have indicated they want to ensure inflation is sustained near a 2 per cent target level and that wages are also rising before adjusting the central bank's longstanding minus 0.1 per cent benchmark interest rate.

“Nonetheless, it would be wrong to conclude that inflationary pressures are now firmly on the decline,” Marcel Thieliant of Capital Economics said in a commentary. With global inflation waning, “weakening in underlying inflation largely reflects the pass-through of falling import costs which is weighing on price rises of processed food products and other industrial products,” it said.

Tokyo's Nikkei 225 index edged 0.1 per cent higher to 33,169.05 and the Kospi in Seoul was flat at 2,599.51.

Hong Kong's Hang Seng index gave up 1.4 per cent to 16,391.02 and the Shanghai Composite index lost 0.1 per cent to 2,914.78. In Sydney, the S&P/ASX 200 was nearly unchanged, at 7,501.60.

Bangkok's SET slipped 0.3 per cent and the Sensex in Mumbai was up 0.2 per cent.

On Thursday, the S&P 500 climbed 1 per cent to 4,746.75. It is within 1 per cent of its all-time high after suffering its worst tumble in nearly three months. The Dow Jones Industrial Average advanced 0.9 per cent to 37,404.35, nearing yet another record. The Nasdaq jumped 1.3 per cent to 14,963.87.

Micron Technology leaped 8.6 per cent for one of the market's biggest gains after reporting stronger results for the latest quarter than analysts expected and saying it sees business conditions improving throughout its fiscal year.

CarMax rose 5.2 per cent after it beat profit expectations despite what it called “persistent widespread pressures in the used car industry.” And cruise operator Carnival steamed 6.2 per cent higher after reporting better quarterly results than expected.

The trio helped lead a widespread rally where more than 90 per cent of the stocks within the S&P 500 climbed.

Reports on Thursday painted a mixed picture of whether the Federal Reserve can pull off its long-odds tightrope walk of bringing about a slowdown in the economy powerful enough to conquer high inflation but not so strong that it causes a recession.

One report showed that slightly more US workers applied for unemployment benefits last week, but the number was still below expectations and low relative to history.

Another report showed manufacturing in the mid-Atlantic region is weakening by more than expected. Manufacturing has been one of the hardest-hit areas of the economy. And a third report said the US economy's growth during the summer wasn't quite as powerful as earlier estimated.

Investors are ebullient about potential rate cuts and a resilient economy in 2024. Both would help buoy stock prices. The S&P 500 has charged 15 per cent higher in roughly two months on anticipation for those twin supports, and the index is on track for an eighth straight week of gains.

That's despite Fed officials having pencilled in far fewer rate cuts for 2024 than Wall Street. Critics say the number of rate cuts traders are expecting is unlikely unless the economy falls into a recession, which some still see as an inevitable consequence of all the rate hikes already instituted by the Federal Reserve.

That's raised criticism that stocks have gone too far, too fast and become too expensive relative to profits that companies are earning. Even before Wednesday's 1.5 per cent drop for the S&P 500, several strategists on Wall Street were forecasting at least a pause in the rally in the short term.

In other trading Friday, US benchmark crude oil added 67 cents to USD 74.56 per barrel in electronic trading on the New York Mercantile Exchange. It gave up 33 cents to USD 73.89 on Thursday.

Brent crude, the international standard, advanced 58 cents to USD 79.74 per barrel.

The US dollar rose to 142.33 Japanese yen from 142.12 yen. The euro slipped to USD 1.0999 from USD 1.1012. (AP)