Asian stocks falls after Chinese inflation data surprises to the upside

BANGKOK (AP) – Shares fell in most Asian markets on Friday after China reported stronger-than-expected price spikes that could prompt authorities to take measures to cool inflation.

The Japanese benchmark index Nikkei 225 rebounded after falling the previous day. Shares fell in Hong Kong, Shanghai, Sydney and Seoul.

On Thursday, Wall Street stocks closed moderately higher, boosted by gains from large tech companies benefiting from lower bond yields. An increase in unemployment claims, however, dampened consumer enthusiasm.

China reported that Consumer prices rose in March due to an increase in fuel prices while producer prices rose at the fastest rate in more than four years.

The consumer price index rose 0.4% in March versus minus 0.2% in February as fuel prices rose nearly 12% year over year. The prices paid by manufacturers increased by 4.4% compared to the previous year.

Inflation reflects rising demand as China’s economy leads the global recovery from the pandemic. Concerns that stronger growth could boost inflation, which regulators in many large economies would then cool down, in part through interest rate hikes, has dominated markets in recent months.

There is also a fresh round US sanctions, This time against seven Chinese supercomputer manufacturers has revived concerns over trade disruption between the two largest economies, Oanda’s Jeffrey Halley said.

“The Asian markets are taking a more cautious stance again today. Geopolitics is never far from the surface, even if it is often lost in global recreational noise, ”Halley said in a report.

The Shanghai Composite Index
SHCOMP, -1.05%
lost 1% and the Hang Seng in Hong Kong
HSI -1.15%
fell 1.3%. Australia’s S & P / ASX 200
XJO, -0.05%
gave up 0.2% and the Kospi
180721, -0.38%
in Seoul fell 0.3%.

Japan’s Nikkei 225
NIK, + 0.20%
rose by 0.2%.

Shares in Sony Corp.
SONY, -0.94%
rose by 2.7% according to the company signed an exclusive film distribution agreement with Netflix
NFLX, + 1.39%.

On Thursday the S&P 500 index
SPX + 0.42%
rose 0.4% to 4,097.17, another record high after records on Monday and Wednesday. The Dow Jones industrial average
DJIA, + 0.17%
rose by 0.2% to 33,503.57. The tech-heavy Nasdaq Composite
COMP, + 1.03%
increased by 1% to 13,829.31.

Small company stocks, which outperformed the broader market this year, also performed well. The Russell 2000 Index
RUT + 0.88%
of smaller companies increased by 0.9% to 2,242.60. The index is up 13.6% so far this year, while the S&P 500, which tracks large companies, is up 9.1%.

Stocks benefited this week as bond yields, which had risen steadily, fell from their highs earlier in the month.

The yield on the 10-year US Treasury bill
TMUBMUSD10Y, 1.650%,
This affects mortgage and other loan interest rates, falling to 1.63% from 1.65% late Wednesday. On Monday it was even 1.75%.

This drop in yields eased the pressure on technology stocks, which have slipped with rising yields in recent months, and made these stocks look expensive. The sector also saw choppy trading as investors put more money into companies that can benefit from the economic recovery.

AAPL, + 1.92%
pink 1.9%, Microsoft
MSFT, + 1.34%
gained 1.3% and Amazon
AMZN, + 0.61%
added 0.6%.

Investors are cautiously optimistic about the economic recovery, particularly in the US, where The vaccine distribution has increased and President Joe Biden has advanced the deadline for states to make doses available to all adults by April 19.

But it is clear that recovery still has a long way to go. The number of Americans who applied for unemployment benefits last week rose again last week as many businesses remain closed or partially closed due to the pandemic.

In remarks on the International Monetary Fund Thursday, Federal Reserve Chairman Jerome Powell said A number of factors are putting the nation on the right track to allow the economy to reopen fully soon.

In other trading, US benchmark crude oil
CL.1, + 0.13%
rose 11 cents to $ 59.71 a barrel in electronic trading on the New York Mercantile Exchange. It lost 17 cents to $ 59.60 on Thursday. Brent crude oil
BRN00, -0.06%,
The international standard fell 2 cents to $ 63.18.

The US dollar rose to 109.32 Japanese yen
USDJPY, + 0.15%
from 109.25 yen. The Euro
EURUSD, -0.27%
fell from $ 1.1917 to $ 1.1904.

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