BANGKOK – European markets mostly opened lower on Wednesday after a day of gains in Asia, as investors expected more clarity on where interest rates, inflation and economies are headed.
Germany’s DAX fell 0.3% to 14,517.96, while the CAC 40 in Paris fell 0.2% to 6,489.76. The UK FTSE 100 was little changed at 7,602.22. Futures for the S&P 500 and Dow Industrials were down 0.4%.
“Equities drift lower as the broader narrative remains flat, with peak inflation optimism meeting increasingly hawkish central bank pivots,” SPI Asset Management’s Stephen Innes said in a comment.
In Asian trading, Hong Kong shares rose 2.2% to 22,014.59 on strong buying in shares of Chinese tech companies after Beijing approved a new batch of video games. This was taken as a sign that business prospects for tech companies are improving after a prolonged government crackdown.
Tokyo’s Nikkei 225 was then up 1% to 28,234.29 Japan reported on its economy shrank at a slower pace than previously reported in the January-March quarter, shrinking 0.5% instead of 1%. The latest data showed that consumer spending was not as weak as previously thought.
In India, the Sensex then lost 0.4% to 54,905.16 Reserve Bank of India raised interest rates by 0.5 basis points to 4.9%.
Reserve Bank of India Governor Shaktikanta Das said the decision aims to stem price increases and mitigate the impact of geopolitical tensions such as the war in Ukraine.
“Upside risks to inflation … materialized earlier than expected,” Das said.
The Kospi in South Korea was little changed at 2,626.15. In Sydney, the S&P/ASX 200 was up 0.4% to 7,121.10. The Shanghai Composite Index recouped early losses to gain 0.7% to 3,263.79.
Tencent, China’s largest gaming company, rose 5.9% despite not being directly affected by government approvals. E-commerce giant Alibaba Group Holding rose 9.6% and grocery delivery service Meituan rose 3.5%.
US stocks rallied on Tuesday as Treasury yields fell. The S&P 500 was up 1%, the Dow Jones Industrial Average was up 0.8% and the Nasdaq Composite was up 0.9%.
That The World Bank has lowered its forecast sharply for economic growth this year, adding to concern as it reflects Russia’s war against Ukraine and the possibility of food shortages and the potential return of ” stagflation,” a toxic mix of high inflation and sluggish growth unseen for more than four decades.
The fragility of the economy has preoccupied Wall Street this year amid concerns about interest rate hikes by the Federal Reserve. The central bank is moving aggressively to stamp out the worst inflation in decades, but risks stalling the economy if it goes too far or too fast.
The Fed is widely expected to hike its short-term interest rate by half a percentage point at next week’s meeting. That would be the second straight hike by double the usual amount, and investors are expecting a third in July.
Treasury yields have risen broadly this year with expectations of a more aggressive Fed. They moderated a bit on Tuesday, however.
The yield on the 10-year Treasury fell back to 2.98% from 3.03% late Monday. The two-year yield, which is more in line with expectations for Fed action, fell more modestly to 2.72% from 2.73%.
The next big update on inflation comes on Friday when the US government releases its latest CPI data.
In other trading, US crude, the benchmark in electronic trading on the New York Mercantile Exchange, rose 78 cents to $120.19 a barrel. Brent crude, the standard for international trading, rose 52 cents to $121.09 a barrel.
The US dollar was trading at 133.79 Japanese yen versus 132.61 yen. The euro slipped from $1.0705 to $1.0682.
AP Business Writers Yuri Kageyama and Zen Soo contributed.
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https://www.local10.com/business/2022/06/08/world-shares-mixed-after-wobbly-rally-on-wall-street/ World stocks mixed after shaky Wall Street rally