Asian stocks mixed, China gains ahead of US price data
In Asia, markets in Tokyo, Hong Kong, Shanghai ended with gains, while Seoul settled marginally lower. Equity markets in Europe were quoting higher in the afternoon session
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Bangkok: Shares were mixed in Asia on Wednesday with Chinese benchmarks pressing higher after a rally in technology companies helped reverse most of an early slide on Wall Street. Hong Kong's Hang Seng rose 1.1 per cent to 19,853.66 and the Shanghai Composite index climbed 1.4 per cent to 3,079.40. Tokyo's Nikkei 225 added 0.3 per cent to 26,249.83 while the S&/ASX 200 edged 0.1 per cent lower to 7,041.20. In Seoul, the Kospi was unchanged at 2,596.63. Investors are awaiting the release later Wednesday of the Labor Department's report on consumer prices for April. On Thursday, it will release its report on producer prices, or wholesale prices that impact businesses, for April. The pace of price increases will influence the Federal Reserve's strategy on interest rates and other monetary policy. The concern is that aggressive action to tame inflation might cause the economy to tip into recession.
"Some wait-and-see is largely in place, as participants refrain from taking on excessive risks, while awaiting how markets will react to the expected decline in US CPI –- the first in seven months," Jun Rong Yeap of IG said in a commentary.
Stocks ended mixed on Wall Street Tuesday after a rally in technology companies helped reverse most of an early slide. The S&P 500 wound up 0.2 per cent higher at 4,001.05 after giving up most of an early gain of 1.9 per cent. The Dow Jones Industrial Average fell 0.3 per cent to 32,160.74. The Nasdaq composite rose 1 per cent to 11,737.67. Big technology stocks, which have been swinging sharply both up and down recently, accounted for much of the S&P 500's turnaround. Apple rose 2.2 per cent and Microsoft rose 2.2 per cent. Gains in communication and health care stocks also helped lift the market, outweighing declines in financial, real estate and other sectors. Bond yields were mixed.
The yield on the 10-year Treasury fell to 2.99 per cent from 3.08 per cent late Monday. Treasury yields have been rising and stocks have been extremely volatile recently as Wall Street adjusts to the central bank's moves to raise interest rates from historic lows to fight persistently rising inflation, which is at its highest levels in four decades. The central bank has raised its benchmark rate from close to zero, where it sat for much of the coronavirus pandemic. Last week, it indicated it will double the size of future increases.
Higher prices on raw materials, shipping and labour have been cutting into corporate financial results and forecasts. Many companies have been raising prices on everything from clothing to food, raising concerns that consumers will eventually cut spending, which would hurt economic growth. Russia's ongoing invasion of Ukraine has only increased worries about rising inflation. The conflict pushed already high oil and natural gas prices even higher, while putting more pressure on costs for key food commodities like wheat, Wheat prices are up more than 40 per cent for the year. US crude oil prices fell 3.2 per cent on Tuesday, but are up about 36 per cent in 2022. The US benchmark gained USD 2 to USD 101.76 per barrel on Wednesday in electronic trading on the New York Mercantile Exchange.
