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Hong Kong shares lead losses in Asia; Australia’s inflation rises


SINGAPORE — Asia-Pacific shares traded mixed on Wednesday ahead of Australia’s inflation report and with investors looking forward to the Fed’s policy decision.

Japan’s Nikkei 225 slipped 0.19%, while the Topix index declined 0.1%.

In Australia, the S&P/ASX 200 gained 0.23%.

South Korea’s Kospi recovered from slight losses to rise fractionally, and the Kosdaq advanced 0.53%.

MSCI’s broadest index of Asia-Pacific shares outside Japan was about flat.

Australia’s inflation data is due Wednesday, and is expected to reach 6.2% for the second quarter, up from 5.1% in the first quarter.

We expect that any impacts on the AUD from today’s CPI will be short lived because the darkening global outlook will be a greater weight on AUD.
Kristina Clifton
Economist, Commonwealth Bank of Australia

ANZ Research in a Wednesday note said it sees headline inflation accelerating to 6.6% from a year ago.

“We think the risks are more balanced for these stronger forecasts given ongoing upside inflation surprises globally,” the note said. CPI in the U.S. and U.K. both came in above expectations this month.

Kristina Clifton, an economist at Commonwealth Bank of Australia, wrote in a note that the CPI reading Down Under could influence the market’s expectations for future rate hikes.

“We expect that any impacts on the AUD from today’s CPI will be short lived because the darkening global outlook will be a greater weight on AUD,” she wrote.

The International Monetary Fund on Tuesday cut its global GDP forecasts for 2022 and 2023. It now expects growth to come in at 3.2% this year, 0.4 percentage points lower than its April projection.

The Australian dollar stood at $0.6946 in early Asia trade.

U.S. stocks slipped overnight after Walmart cut its earnings forecast.

The Dow Jones Industrial Average slipped 228.50 points, or 0.71%, to 31,761.54. The S&P 500 dipped by 1.15% to 3,921.05, while the Nasdaq Composite fell around 1.87% to 11,562.57.

The Federal Open Market Committee began its meeting on Tuesday stateside and will continue on Wednesday.

Expectations for a 75 basis point move were at 75.1%, according to the CME Group’s FedWatch Tool.

In corporate news, chipmaker SK Hynix reported 56% growth in operating profit to 4.2 trillion Korean won ($3.2 billion) in the second quarter of 2022 compared to a year ago. Revenue jumped 34% to 13.8 trillion won, helped by the “continued rise of the U.S. dollar,” the company said in a statement.

But SK Hynix predicted that memory demand would slow in the second half of the year because shipments of PCs and smartphones are expected to be lower than initial forecasts.

The company’s stock was last up 0.5%.

Automaker Mitsubishi Motors and miner Rio Tinto are also set to report earnings.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 107.133, higher than Tuesday’s levels.

The Japanese yen traded at 136.95 per dollar.

Oil futures rose in Asian trade. U.S. West Texas Intermediate crude futures were 0.61% higher at $95.56 per barrel, while Brent crude futures climbed 0.31% to $104.72 per barrel.

— CNBC’s Tanaya Macheel, Sarah Min and Karen Gilchrist contributed to this report.

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