FILE – In this Nov. 11, 2010 file photo, traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew, file)
TOKYO (AP) — Asian stocks were mostly lower Tuesday as an interest rate hike in South Korea added to speculation China will also tighten monetary policy to cool inflation.
South Korea’s Kospi fell 0.5 percent to 1,903.81 after the Bank of Korea raised its key interest rate for the second time in four months to 2.5 percent from 2.25 percent. The decision comes as the country grapples with concerns about inflation as well as broader worries about a slowing global economy.
There are also expectations China will raise soon raise interest rates again to cool growth after inflation hit a 25-month high in October. Any slowdown in the Chinese economy, the world’s second-largest and fastest growing, would likely reduce its demand for oil, metals, grains and other imports and be felt around the world.
China’s Shanghai Composite Index slid 1 percent to 2,985.50 and Hong Kong’s Hang Seng was down 0.1 percent to 24,012.87. Markets in India and Singapore were also lower.
Japan’s Nikkei 225 stock average added 0.1 percent to 9,836.52 and Australia’s SP/ASX 200 rose 0.3 percent to 4,700.30.
The dollar’s rise above the 83-yen line lifted exporter shares in Tokyo, sending the Nikkei briefly to a five-month high before succumbing to ongoing caution over global risks, including Europe’s debt woes. Toyota Motor Corp. rose 0.6 percent and Sony Corp. jumped 1.5 percent.
New York stocks had a mixed finish Monday as the dollar posted its second day of gains over concerns that Europe is on the edge of another bailout.
Investors believe that Ireland may seek help from its fellow members in the European Union as its economy sputters. The dollar also spiked in May when Europe bailed out Greece.
The Dow Jones industrial average rose 9.39, or 0.1 percent, to close at 11,201.97. The broader Standard Poor’s 500 index fell 1.46, or 0.1 percent, to 1,197.75, while the technology-focused Nasdaq composite index fell 4.39, or 0.2 percent, to 2,513.82.
In currencies, the dollar fell to 82.95 yen from 83.13 yen late Monday. The euro rose to $1.3635 from $1.3570.
Benchmark crude for December delivery was down 15 cents at $84.71 a barrel in electronic trading on the New York Mercantile Exchange. The contract slipped 2 cents to settle at $84.86 on Monday.