Asia report: Shares mixed on US Fed rate caution; China up on growth boost

Asia-Pacific stocks were mixed on Thursday as investors digested comments from US Federal Reserve governors on the scale of future interest rate rises and economic upgrades on the outlook for China.

New York Fed President John Williams on Wednesday said a move to a federal funds rate of 5 - 5.5% was a “very reasonable view” of what was needed in 2023 “to get the supply and demand imbalances down".

Meanwhile governor Christopher Waller said hitting the Fed's 2% inflation target "might be a long fight", while governor Lisa Cook said the hot January jobs report that also showed moderate wage growth could lead to a "soft landing".

On Asia-Pacific markets, Australia’s S&P/ASX 200 closed 0.53% lower at 7,490.3, as shares of major power producer AGL Energy fell after posting a half-year loss.

Japan’s Nikkei 225 fell slightly to 27,584.35. In South Korea, the Kospi also ended marginally lower at 2481.52.

Hong Kong’s Hang Seng index rose 1.60% to 21,624.36, while the Shanghai Composite rose 1.18% to 3,270.38.

Sentiment was boosted by an upgrade from Barclays for China's economic growth to 5.3% this year, from 4.8% previously, while Fitch revised up growth forecasts this year to 5%. Both cited accelerated recovery in consumer spending.

Optimism was also helped by US President Joe Biden, who on Wednesday said that relations with China have not taken a big hit after Washington downed a suspected Chinese spy balloon.

In other equity news, shares in Japanese auto giant Toyota gained after the company posted a 22% year-on-year jump in operating profit for the final quarter of 2022.

Hong Kong-listed shares of casinos rose after Wynn Resorts and MGM Resorts released latest earnings reports overnight.

Australia’s AGL Energy fell more than 10% after the company reported a 55% drop in its underlying net profit after tax for the June-December period of 2022 compared to the same period a year ago.

AGL boss Damien Nicks said in the company’s earnings report that the “challenged” first half performance was driven by the impact of plant outages during “unprecedented energy market conditions” in July.

Reporting by Frank Prenesti for Sharecast.com