Asia Stocks Mixed Amid Rising Interest Rates and High Energy Costs

Asian stocks opened mixed on Monday, September 28, as investors braced for more interest rate hikes and watched energy costs stay high. The MSCI's gauge of Asian equities started the session lower. South Korea's benchmark slid after a holiday, while Japanese shares edged higher.

Kospi lost 0.46%, Japan's Topix rose 0.48%, and the Nikkei 225 rose 0.89%. Hang Seng futures barely moved. In India, the GIFT Nifty hinted at a muted start in the red, following last week's decline.

The Indian markets have had seven straight weeks of decline, one of its worst performance since the covid pandemic. Rising borrowing costs seemed to drive caution in the markets, with the average yield on a gauge of global bonds climbing above 4% for the first time since 2007.

US Federal Reserve officials added to those worries, saying that resilient growth and a strong labor market may justify more tightening. Cleveland Fed President Beth Hammack said this was driving long-term Treasury yields higher.

Traders responded by fully pricing in at least one more 25 basis-point hike before the end of the year according to a Bloomberg report. US Treasury Secretary Scott Bessent struck a gentler tone, urging policymakers to keep an 'open mind' on rates.