Asian stocks mixed after US inflation report | Economic news

By YURI KAGEYAMA, AP Business Writer

TOKYO (AP) – Asian stocks were mixed on Thursday after a disturbing report on US inflation hit the bond market and pushing stocks down on Wall Street.

In Japan, where investors are awaiting an economic stimulus package from newly elected Prime Minister Fumio Kishida, the benchmark Nikkei 225 climbed 0.6% in morning trading to 29,295.20. The Australian S & P / ASX 200 fell 0.6% to 7,371.20. South Korea’s Kospi lost 0.5% to 2,916.71. The Hong Kong Hang Seng lost 0.2% to 24,931.23, while the Shanghai Composite gained 0.6% to 3,513.55.

A recent regulatory crackdown in China has weighed on tech issues, but some stocks are recovering as some investors start to think the sell-off has been overdone.

“Sentiments are expected to remain limited by the negative Wall Street advance overnight, with market participants taking some risk in the market while waiting to be reassured about the direction of monetary policy,” Yeap Jun Rong said , market strategist at IG in Singapore.

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In the United States, prices for beef, electricity and other items paid by consumers in October jumped from last year’s levels at the fastest overall pace since 1990, suggesting that the Federal Reserve will need to raise short-term interest rates faster from their record lows. This sent Treasury yields to their biggest gains in months.

The two-year Treasury yield tends to move with Fed action expectations, and it jumped to 0.51% from 0.41% on Tuesday night, a significant move.

Longer-term Treasury yields also rose, with the 10-year yield hitting 1.55% Thursday morning from 1.43% Wednesday night.

Rising yields tend to be a drag on stocks, especially those considered the most expensive or where expectations of significant earnings growth are farthest in the future. Declines in several high-growth tech stocks weighed on Wall Street, as did the decline in energy stocks following a drop in the price of crude oil.

The S&P 500 lost 0.8% to 4,646.71 for its second consecutive decline. He’s just come out of a strong race where he set a record in each of the previous eight days.

The Dow Jones Industrial Average fell 0.7% to 36,079.94. The Nasdaq composite, which has more tech stocks, fell further. It lost 1.7% to 15,662.71.

Driven by the inflation report, investors now anticipate a 66.5% chance that the Fed will raise rates by the end of June. A day earlier, this probability was 50.9%.

The Fed has been keeping overnight rates at a record high near zero since March 2020 to resuscitate markets and the economy from the pandemic. He has already started cutting back on his bond purchases each month to keep long-term rates low.

Other central banks have mostly kept rates low, although some, including New Zealand and Indonesia, are already taking action to tighten their policies.

In the stock market, higher yields tend to favor stocks that look cheap, or at least cheaper than their peers. These are often referred to as “value” stocks to distinguish them from stocks of high growth companies.

“It’s a fight between growth and value, and neither has really taken over lately,” said Tom Martin, senior portfolio manager at Globalt Investments. “You’re going to have a decent market until the end of the year and at some point you’ll see people really starting to try to position themselves for what they think 2022 might look like.”

A 3.3% drop in the price of US oil also helped push energy stocks to the biggest loss among the 11 sectors that make up the S&P 500.

Tesla regained some of the ground lost the previous two days after its CEO, Elon Musk, announced he would sell 10% of his stake in the company. It rose 4.3%, but remains down 12.6% for the week.

Rivian Automotive, an electric truck maker backed by Amazon and Ford, rose 29.1% on its first day of listing.

DoorDash rose 11.6% after reporting higher than expected revenue for its last quarter and announcing it was purchasing Finnish delivery service Wolt Enterprises, expanding its reach into Europe and other markets.

In energy trading, benchmark US crude added 18 cents to $ 81.52 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 20 cents to $ 82.84 a barrel.

In currency trading, the US dollar rose from 113.86 yen to 114.00 Japanese yen. The euro cost $ 1.1478, compared to $ 1.1480.

AP Business Writers Damian J. Troise and Stan Choe contributed.

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