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Asian stocks mixed following Wall St retreat on economy concerns.

Asian stocks mixed following Wall St retreat on economy concerns.

Stock markets in Asia were mixed on Tuesday, following a decline on Wall Street. Concerns surround the state of the US economy, as a report showed the growth in service industries slowing down. Edward Moya of OANDA believes that this is just the beginning, stating that “weakness is emerging, and that should be more noticeable in the coming months”. Australia’s central bank has lifted its benchmark interest rate to 4.1%, which marks the 12th consecutive time. Despite this, the S&P ASX 200 in Sydney dropped 0.9% to 7,149.00.

Tokyo and Hong Kong rose, with the Nikkei 225 in Tokyo gaining 0.7% to 32,454.78, after the government revealed that Japanese wages rose by 1% YoY in April, although growth slowed from the prior month’s 1.3%. The Shanghai Composite Index fell 0.3% to 3,222.35, while the Hang Seng rose 0.6% to 19,220.23. India’s Sensex opened down 0.3% at 62,599.57. South Korean markets were closed for a holiday.

On Wall Street, the benchmark S&P 500 index lost 0.2% on the back of an industry group’s index of activity in hospitality, construction, and other services falling to a three-year low in May. This report conflicted with data released last week, which showed unexpectedly strong hiring in May – suggesting a US recession, caused by interest rate hikes, may be further away.

Traders are worried that rate hikes from the Federal Reserve and central banks in Europe and Asia to cool inflation at its multidecade highs, will push the global economy into a recession. They hope that indications of slowing US economic activity will prompt the Fed to postpone or scale back a possible additional rate increase at its meeting this month.

The majority of stocks sank after a weeks-long rally carried Wall Street to a ten-month high. In addition, manufacturing is also seen to be weakening, and high interest rates led to three high-profile US bank failures and one in Switzerland that rattled financial markets.

Last week’s data showed that US employers accelerated hiring in May, while increases in workers’ wages decreased. This proved to be a positive for Wall Street, as it helped push the index towards the brink of ‘bull market’ territory, which is marked by a 20% increase in the S&P 500 over its mid-October low.

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In energy markets, benchmark US crude lost 36 cents to $71.79 per barrel, while Brent crude, the price basis for international oil trading, sank 34 cents to $76.37 per barrel in London.

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