Asian stocks split as US inflation fuels rate fears

Asian stock markets diverged on Wednesday as renewed interest in artificial intelligence shares was offset by US inflation data and concern that the Federal Reserve could raise interest rates again next month.

Tokyo, Seoul and Taipei rose, helped by gains in AI-linked technology shares. Singapore and Jakarta also advanced. Hong Kong, Shanghai, Sydney, Wellington and Manila fell.

At around 0230 GMT, Tokyo’s Nikkei 225 was up 0.8 percent at 60,942.48 and Seoul’s Kospi was also up 0.8 percent at 5,278.32. Hong Kong’s Hang Seng Index was down 0.8 percent at 24,368.21, while Shanghai’s Composite Index fell 0.3 percent to 3,654.42.

The mixed trading followed a weaker Wall Street session, where all three main indexes closed lower on Tuesday after a two-day rally.

US consumer prices rose 0.4 percent on month in October, slowing from 0.6 percent the previous month. The item said traders were weighing whether the Federal Reserve could make a larger interest-rate increase at its December meeting.

Federal Reserve Governor Christopher Waller called for a swift response to inflation and suggested he could support a 50-basis-point increase in December. Dallas Fed President Lorie Logan also signalled support for swift action, while Chicago Fed President Austan Goolsbee called the inflation reading “another distressing report, borderline disturbing”.

Technology shares found some support from company news. Data centre operator CoreWeave said sales would come in at $13 billion to $13.3 billion this year. Anthropic filed plans to raise up to $64 billion in an initial public offering that could value the company at as much as $1.4 trillion.

Bloomberg reported that OpenAI earned $10 billion in quarterly revenue for the first time in July-September, helped by demand for its software.

Oil prices edged up after falling on Tuesday. Brent crude was at $91.87 a barrel around 0230 GMT, and West Texas Intermediate was at $86.19. Japanese technology investment group SoftBank fell as much as eight percent in Tokyo after reporting a more than $7 billion loss in its fiscal second quarter.