Asian shares trade mixed with earnings, regional tensions

By YURI KAGEYAMA
AP Business Writer

TOKYO (AP) — Asian shares were mixed Wednesday as investors watched for upcoming earnings reports and other indicators on how inflationary pressures might be denting global growth.

Japan’s benchmark Nikkei 225 was virtually unchanged in morning trading, inching up less than 0.1% to 27,446.91. Australia’s S&P/ASX 200 edged up 0.1% to 7,266.90.

Hong Kong’s Hang Seng jumped 3.0% to 20,379.03, as the lifting of its mask mandate kicked in, ending the city’s last major restriction imposed during the COVID-19 pandemic.

Hong Kong’s chief executive, John Lee, announced Tuesday that masks will no longer be required both outdoors and indoors, but some high-risk areas including hospitals and elderly homes can still require their use.

The Shanghai Composite added 0.8% to 3,304.20. South Korean markets were closed for a national holiday.

Investors are watching for regional trends after China’s reopening from COVID-19-related restrictions, which might be counteracted by tensions that from sinking U.S.-China relations.

They’re also keeping an eye on Wall Street and earnings data. Most companies have already reported their results for the last three months of 2022, but several big-name retailers are still on the schedule for this week.

“The consumer and inflation are in focus over the next few days. After last week’s drubbing among retail stocks, the worst since June last year, some upbeat earnings results from Target should buoy the group,” said Brian Overby, senior market strategist at Ally, while warning that more volatility may be in store later this week.

A frigid February for Wall Street closed out with more losses on Tuesday, with the S&P 500 falling 0.3% to to 3,970.15, locking in a loss of 2.6% for the month. The Dow fell 232.39 to 32,656.70, and the Nasdaq dropped 11.44 to 11,455.54. Both also sank over the month.

After a strong start to the year bolstered by hopes that inflation was on the way down, Wall Street shifted into reverse in February. A stream of data showed inflation and the overall economy are remaining more resilient than expected. That’s forced investors to raise their forecasts for how high the Federal Reserve will take interest rates and how long it will keep them there.

High rates can drive down inflation, but they also raise the risk of a recession down the line because they hurt the economy. They also drag on prices for stocks and other investments.

Heightened expectations for rates sent yields jumping in the bond market Tuesday. The yield on the 10-year Treasury held steady at 3.92%. It helps set rates for mortgages and other loans that shape the economy’s health, and still near its highest level since November. The two-year yield, which moves more on expectations for Fed action, ticked up to 4.81% from 4.78%. It’s near its highest level since 2007.

Reports on the economy released Tuesday showed some slight cracks. One said that confidence among U.S. consumers unexpectedly fell in February. Another said that manufacturing in the Chicago region weakened by more than expected.

In energy trading, benchmark U.S. crude added 43 cents to $77.48 a barrel. Brent crude, the international standard, rose $0.44 to $83.89 a barrel.

In currency trading, the U.S. dollar inched up to $136.40 Japanese yen from $136.20 yen. The euro stood unchanged at $1.0583.

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AP Business Writer Stan Choe contributed.