Shares in Asia are mostly higher after the S&P 500 index hit another record high despite a jump in US consumer prices in May
BANGKOK – Shares in Asia were mostly higher on Friday after the S&P 500 index hit another record high despite a jump in US consumer prices in May.
Shanghai fell, Tokyo was almost unchanged, while shares rose in Hong Kong, Seoul and Sydney. US futures closed marginally lower.
On Thursday, Wall Street posted gains while bond yields fell despite a much-anticipated report that saw consumer prices rise 5% in May, the biggest year-on-year increase since 2008 and more than economists expected. was more.
Investors also reacted positively to more data showing continued improvement in the labor market.
Worryingly, if signs of inflation continue, central banks may proceed to withdraw stimulus from the economy to ease price pressures.
But investors are still buying into the Federal Reserve’s stance that the current fight against inflation is fleeting, said OANDA’s Jeffrey Haley.
“Financial markets have long used selective use of facts as an art,” Haley said in a report. Although US inflation measures once again rose and were slightly above forecast, real growth was recorded in April. was less than that.”
Taking all factors into account, “this was the only road to return to my buy-everything happy place.”
In Asia, where Sino-US tensions are among many factors influencing sentiment, the mood was less encouraging.
Tokyo’s Nikkei 225 index remained unchanged at 28,948.73, while the Hang Seng in Hong Kong rose 0.4% to 28,847.02. In Seoul, the Kospi rose 0.8% to 3,249.32, while the Shanghai Composite Index slipped 0.5% to 3,593.20.
India’s Sensex rose 0.3%.
On Thursday, the S&P 500 rose 0.5% to 4,239.18, beating its previous all-time high set on May 7. The Dow Jones Industrial Average gained 0.1% to end at 34,466.24. The Nasdaq Composite rose 0.8% to 14,020.33, while shares of the smaller company lagged behind the broader market. The Russell 2000 Index fell 0.7% to 2,311.41.
A significant portion of May’s increase in consumer prices was linked to used car sales, which is largely attributed to purchases by rental car companies as people return to travel.
Bond yields rose initially after inflation data, then fell broadly later in the afternoon. The yield on the 10-year Treasury note declined to 1.43% from 1.45% late Thursday.
The stock remained volatile throughout the week as investors waited for an update on inflation.
Investors will get to see next week how the Fed is reading the latest inflation barometer and what changes in monetary policy, if any, central banks may consider. The Fed’s policymaking committee is due to deliver its latest economic and interest rate policy updates next Wednesday.
Markets will also be prepared for any developments at the Group of Seven summit in the UK later this week. Top of the leaders’ agenda is to help countries recover from the coronavirus pandemic, which has killed more than 3.7 million people and ravaged economies.
G-7 leaders are meeting for three days at a British seaside resort. This is the first such gathering before the pandemic.
In other trade, benchmark US crude oil fell 7 cents to $70.22 a barrel in electronic trading on the New York Mercantile Exchange. It rose 33 cents to $70.29 a barrel on Thursday.
Internationally, Brent crude fell by 5 cents to $72.47 a barrel.
The US dollar was trading at 109.39 Japanese yen from 109.42 yen. The euro rose from $1.2176 to $1.2184.