Stocks
Asian markets mixed as traders pause ahead of US inflation data
Equities fluctuated Monday as traders took a breather after the past weeks’ healthy run as they absorbed weak Chinese data and reports that the United States planned to ramp up tariffs on clean energy products from the Asian country.
A sharp drop in US consumer confidence and a pick-up in inflation expectations also weighed on sentiment as eyes turn to the release later this week of the latest consumer price index (CPI).
The readings follow a recent rally across world markets fuelled by optimism that the Federal Reserve and other major central banks will soon cut interest rates.
The week was set to begin on a tepid note after figures showed a drop in a broad measure of credit in China that sparked worries of a further slackening in the world’s number two economy.
That came as the Wall Street Journal reported that the White House is looking at almost quadrupling tariffs on Chinese electric vehicles as part of a plan that will also target batteries and solar cells.
A decision, expected on Tuesday according to reports, would come as President Joe Biden gears up for a rematch with Donald Trump in November’s presidential election.
Last month, he urged for a tripling on tariffs for steel and aluminium as he courted blue-collar voters.
Still, analysts said the decision on EVs would not likely have much impact on China’s growth as the sector was not reliant on US buyers, while some said retaliatory actions were unlikely.
The news came after weekend figures showing China’s CPI rose more than expected in April, marking the third straight month of gains and providing some fresh hope for the economy.
In New York, the Dow and S&P 500 rose, even as a report showed consumer sentiment tumbled in April to its lowest level since November, while a survey of inflation expectations over the next year picked up.
Investors are now keeping a close eye on the US CPI, which is due Wednesday and will be pored over for an idea about the Fed’s plans. The reading comes after three straight months of forecast-beating readings that have seen a whittling away of rate cut expectations.
Meanwhile, Dallas Fed chief Lorie Logan warned she thought it too early to think about any reductions, while governor Michelle Bowman did not see so far foresee any this year.
“As long as the labour market remains tight, consumer resilience could continue to dampen hopes of inflation cooling off,” Subadra Rajappa, at Societe Generale in New York, said.
“A resumption of the disinflationary trend is imperative for the Fed to consider cutting this year.”
Discussion on the US rate outlook comes as expectations rise that the European Central Bank and Bank of England are planning to cut in the summer.
London, Paris, Frankfurt and Amsterdam all hit new heights, with shares also benefitting from strong first-quarter earnings.
However, Asian markets were mixed in early exchanges, with Shanghai, Sydney, Seoul, Wellington and Jakarta all down, while Hong Kong, Singapore, Taipei and Manila rose, with Tokyo flat.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: FLAT at 38,243.59 (break)
Hong Kong – Hang Seng Index: UP 0.6 percent at 19,084.04
Shanghai – Composite: DOWN 0.5 percent at 3,139.55
Dollar/yen: DOWN at 155.85 yen from 155.88 yen on Friday
Euro/dollar: DOWN at $1.0770 from $1.0772
Pound/dollar: DOWN at $1.2522 from $1.2525
Euro/pound: DOWN at 86.01 from 86.06 pence
West Texas Intermediate: DOWN 0.6 percent at $77.82 per barrel
Brent North Sea Crude: DOWN 0.6 percent at $82.32 per barrel
New York – Dow: UP 0.3 percent at 39,512.84 (close)
London – FTSE 100: UP 0.6 percent at 8,433.76 (close)
Reviewing the U.S. Stock Markets, the Nasdaq Composite, recorded a decent loss of 1,023 points, reaching a closing value of 16,690 points by the end of the week. Similarly, the S&P 500 index showed a positive trend, losing 240 points to settle at 5,408 points. Meanwhile, DJIA Index experienced a notable hike, adding 1,218 points during the week and concluding at 40,345 points after a week of gaining.
In contrast, Russell 3000 Index saw a loss in week performance, with a slight drop of 141 point to reach 3,077 points by the end of the week.
Moving to Russell 2000 Index, demonstrated a notable lost of 126 points, ending the week at 2,091 points.
In the Outgoing week, the European stock market displayed a mixed performance.
Here is the data on the weekly performance of the European Stock Market, The STOXX Europe 600 index, which is considered a leading benchmark for the European market and covers approximately 90 percent of the market capitalization across 17 countries, reported a loss of 18.49 points to close at 506.56.
The United Kingdom’s FTSE 100, one of the most widely followed indices in Europe, also showed a significant drop, losing 195 points or finishing the session at 8,181.
In Germany, the DAX 30 index, added by 605 points to reach 18,301, while France’s CAC 40 decreased by 278 points to stop at 7,352 at the end of the trading day.
Italy’s FTSE MIB, which covers the top 40 stocks traded on the Milan Stock Exchange, decreased by 1,081 points to 33,291. However, Spain’s IBEX 35, lost by 228 points, to close at 11,173.
A review of South Asian stock markets shows that India’s Bombay Stock Exchange (BSE) index BSE Sensex has lost 1,182 points during the week. At the end of the week, the index stood at 82,365 points. On the other hand, the Nifty-50 index of the country’s National Stock Exchange dropped by 383 points last week. At the end of the week, the index stood at 24,852 points.
Pakistan Stock Exchange Index ‘KSE 100’, added 459 points last week. After a week of losing, the index settled at 79,002 points.
On the other hand, The Sri Lankan stock market index loss, and the Colombo Stock Exchange index ‘ASPI’ decreased by 94 points in a week. After a week the index settled at 10,775 points.
Bhutan’s stock market index ‘BSI’ dropped by 9 points hence the index stood at 1,500 points throughout the whole week. Nepal’s ‘NEPSE’ lost 22 points, therefore the index stands at 2,727 points.
Hence Dhaka Stock Exchange: The benchmark index ‘DSEX’ lost by 75.77 points or 1.31 percent, in the outgoing week. At the end of the week, the index stands at 5,728 points.
