Asian stocks were mixed on Wednesday after China signaled a sharp rise in ex-factory prices at a time when inflation is a major concern for investors.
Shares fell in Tokyo, Seoul, Sydney and Hong Kong but rose in Shanghai
China’s producer price index, which measures the prices of raw materials and services, jumped 9% from a year earlier in May, the fastest rise since 2008, during the financial crisis global, and above analysts’ forecasts, the government said.
However, the overall consumer price index rose 1.3% more modestly, lower than expected. Inflation in the first five months of the year averaged 0.4%.
Soaring prices for petroleum and other raw materials and manufacturing components such as semiconductors were the main factor behind the surge in producer prices, said Julian Evans-Pritchard of Capital Economics in a comment. He noted that the prices of electronic products, in high demand during the pandemic, have fallen.
“This comes in addition to signs from the latest trade data that global demand for Chinese consumer goods may start to decline as the distortions in spending patterns caused by the pandemic reverse,” he said.
For now, the Chinese government appears to be focused on addressing the supply side constraints driving higher prices and less worried about a possible price spiral due to increased consumer demand, according to the reports. economists.
Investors are more concerned with the US inflation data released on Thursday and what it might portend for interest rates and other supportive market policies.
Tokyo’s Nikkei 225 index fell 0.4% to 28,860.80 and Seoul’s Kospi also fell 0.9% to 3,219.13. Hong Kong lost 0.3% to 28,704.18 while the S & P / ASX 200 in Sydney edged down 0.2% to 7,277.30. The Shanghai Composite Index rose 0.2% to 3,585.84.
Shares opened higher in India and Jakarta, but fell in Singapore and Taiwan.
US stock indexes meandered to another patchy end on Tuesday. Investors are awaiting inflation data due to be released later in the week, although some corners of the market – cryptocurrencies and some high profile social media stocks – have kept traders busy.
The S&P 500 rose less than 0.1% to 4,227.26. It remains the loser at its all-time high on May 7 and has barely moved in the past two days. The Dow Jones Industrial Average slipped 0.1% to 34,599.82, while the Nasdaq posted a gain of 0.3%, closing at 13,924.91.
Smaller company stocks once again outperformed the market as a whole, with the Russell 2000 Index of Small Companies gaining 1.1% to 2,343.76.
Wendy’s jumped 25.9% as it appeared to join a group of companies favored by individual investors taking inspiration from social media forums. Clover Health Investments climbed 85.8%. Other companies whose share values have fluctuated sporadically include AMC Entertainment, Blackberry, and GameStop.
Cryptocurrency traders appeared to be in the mood to sell. Bitcoin and other popular digital currencies, including Ethereum and Dogecoin, have all fallen sharply, according to Coindesk. Bitcoin, which topped $ 60,000 earlier this year, slipped 7% to $ 32,690.
Shares of Fastly, an internet cloud service provider, climbed 10.8% after it said it fixed an internal issue that caused dozens of websites around the world to briefly shut down, including the homepage of the British government and The New York Times.
As investors reflect on the state of the recovery, the World Bank has improved its outlook for global growth this year, predicting that COVID-19 vaccinations and massive stimulus measures from governments in rich countries will propel the economy forward. fastest growing worldwide in nearly five decades. The 189-country anti-poverty agency predicts the global economy will grow 5.6 percent this year, up from 4.1 percent it estimated in January. Last year, the world economy contracted 3.5%.
The trajectory of inflation could determine whether central banks continue to generously support economies or withdraw, but the pandemic is causing disruptions and distortions that add to the uncertainty.
Besides soaring prices for raw materials, fuel and other items needed for manufacturing, factories are struggling to keep up with demand as the pandemic recedes in many places. It has pushed up the prices of everything from food to basic necessities.
In other exchanges, the benchmark US crude oil gained 39 cents to $ 70.44 per barrel in electronic trading on the New York Mercantile Exchange. It gained 82 cents to $ 70.05 a barrel on Tuesday. Brent crude, the international standard, added 40 cents to $ 72.62 a barrel.
The US dollar slipped to 109.46 Japanese yen from 109.49 yen. The euro rose to $ 1.2182 from $ 1.2174 yen.