Asian stocks mixed in kickoff to new week of trading

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BEIJING (AP) — Asian stock markets were mixed Monday after last week’s Wall Street decline amid worries that the Federal Reserve will raise interest rates as soon as March.

U.S. stocks were also pointed toward a mixed start to the week, as Dow futures remained under modest pressure while the S&P 500 and Nasdaq Composite appeared increasingly likely to overcome early declines.

Shanghai and Hong Kong advanced. Seoul and Sydney declined. Japanese markets NIY00, +0.28% were closed for a holiday.

Investors were rattled last week after notes from the latest Fed meeting showed officials thought the U.S. job market is healthy enough that it might no longer need ultralow interest rates and other stimulus.

That was reinforced by U.S. employment numbers Friday that showed stronger-than-expected wages, though with only about half as much hiring as forecast.

The prospect of earlier rate hikes “suggests that markets could continue to be roiled by volatility,” Tan Boon Heng of Mizuho Bank said in a report.

The Shanghai Composite Index SHCOMP, +0.31% gained 0.2% to 3,587.69 and the Hang Seng in Hong Kong HSI, +0.80% advanced 0.9% to 23,702.90. The Kospi in Seoul 180721, -0.95% fell 1.2% to 2,919.46 and Sydney’s S&P ASX 200 XAO, -0.11% lost 0.1% to 7,444.70.

Investors were cautious after Fed officials said in December that plans to roll back ultralow rates and other economic stimulus that has boosted share prices might be accelerated to cool U.S. inflation now at a four-decade high.

See: Traders, undeterred by December’s lousy job gains, continue to price in ‘sooner and faster’ tightening by Federal Reserve

On Friday, Wall Street’s benchmark S&P 500 index SPX, -0.41% fell 0.4% to 4,677.03, or about 2.5% below Jan. 3’s record high.

The Dow Jones Industrial Average DJIA, -0.01% slipped less than 0.1% to 36,231.66. The Nasdaq Composite COMP, -0.96% fell 1% to 14,935.90.

Investors are pricing a better than 79% probability that the Fed will raise short-term rates in March. A month ago, they saw less than 39% of a chance of that, according to CME Group.

Record-low interest rates have helped to boost stock prices despite bouts of unease about the coronavirus pandemic.

The Fed already has slowed bond purchases that were pumping money into the financial system to push down commercial lending rates. Notes from its December meeting indicated Fed officials might to cut off such purchases more quickly than previously planned.

In energy markets, benchmark U.S. crude CL00, +0.10% rose 17 cents to $79.07 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 56 cents on Friday to $78.90. Brent crude BRN00, +0.10%, used to price international oils, added 20 cents to $81.95 per barrel in London. It lost 24 cents the previous session to $81.75.

The dollar USDJPY, +0.24% gained to 115.79 yen from Friday’s 115.56 yen. The euro EURUSD, -0.26% declined to $1.1337 from $1.1362.