Asian stocks mixed ahead of Fed rate hike decision

Asian stock markets were mixed Wednesday ahead of a Federal Reserve decision on how sharply to raise interest rates to cool U.S. inflation, the Associated Press reported.

Shanghai and Hong Kong advanced. Tokyo and Sydney declined. Oil prices edged higher.

Wall Street’s benchmark S&P 500 index lost 0.4% on Tuesday.

Traders expect the Fed rate hike to be three-quarters of a percentage point, or triple the usual margin. They worry aggressive action to cool inflation that is running at a four-decade high might tip the biggest global economy into recession.

The Shanghai Composite Index gained 1.8% to 3,348.58 after Chinese factory activity rebounded in May as anti-virus controls that shut down businesses in Shanghai and other industrial centers eased.

Hong Kong’s Hang Seng gained 1.6% to 21,396.83 while the Nikkei 225 in Tokyo lost 1.1% to 26,326.16.

The Kospi in Seoul shed 1.8% to 2,447.52 after the government reported South Korea’s unemployment rate ticked up 0.1 percentage point to 2.8% in May.

Sydney’s S&P-ASX 200 sank 1.3% to 6,599.20.

India’s Sensex opened down less than 0.1% at 52,683.77. New Zealand, Indonesia and Bangkok declined while Singapore advanced.

On Wall Street, the S&P 500 declined to 3,735.48, putting it 21.8% below its Jan. 3 peak. That puts it in a bear market, or a drop of 20% from the last market top.

The Dow Jones Industrial Average fell 0.5% to 30,364.83 and the Nasdaq composite rose 0.2% to 10,828.35.

Expectations of an unusually big Fed rate hike increased after government data Friday showed consumer inflation accelerated in May instead of easing as hoped.

The Fed is scrambling to get prices under control after being criticized earlier for reacting to slowly to inflation pressures.

Britain’s central bank also has raised rates, and the European Central Bank says it will do so next month.

Japan’s central bank has kept rates near record lows. That has caused the yen to fall to two-decade lows around 135 to the dollar as traders shift capital in search of higher returns.