Asian shares mixed as China reports jump in inflation

AP – Asian shares were mixed yesterday after China reported a big jump in factory gate prices at a time when inflation is a top investor concern.

Shares fell in Tokyo, Seoul, Sydney and Hong Kong but rose in Shanghai.

China’s producer price index, which measures prices of raw goods and services, jumped nine per cent from a year earlier in May, the fastest increase since 2008, during the global financial crisis, and above analysts’ forecasts, the government said.

However, the headline consumer price index rose a more modest 1.3 per cent, lower than expected. Inflation in the first five months of the year averaged 0.4 per cent.

Surging prices for oil and other commodities and manufacturing components such as semiconductors were the main factor behind the jump in producer prices, Julian Evans-Pritchard of Capital Economics said in a commentary. He noted prices of electronics products, in strong demand during the pandemic, have eased.

“This adds to signs from the latest trade data that global demand for Chinese consumer goods may be starting to drop back as distortions to spending patterns caused by the pandemic reverse,” he said.

A man walks in front of an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo. PHOTO: AP

Tokyo’s Nikkei 225 index fell 0.4 per cent to 28,860.80 and the Kospi in Seoul also fell 0.9 per cent to 3,219.13. Hong Kong shed 0.3 per cent to 28,704.18 while the S&P/ASX 200 in Sydney edged 0.2 per cent lower to 7,277.30. The Shanghai Composite index advanced 0.2 per cent, to 3,585.84.

Shares opened higher in India and Jakarta but fell in Singapore and Taiwan.

United States (US) stock indexes meandered to another uneven finish on Tuesday. Investors are awaiting the inflation data due out later in the week, though some corners of the market — cryptocurrencies and some social media-hyped stocks — kept traders busy.

The S&P 500 inched up less than 0.1 per cent to 4,227.26. It remains lose to its May 7 all-time high and has barely moved the last two days. The Dow Jones Industrial Average slipped 0.1 per cent to 34,599.82, while the Nasdaq mustered a 0.3 per cent gain, closing at 13,924.91.

Smaller company stocks once again outpaced the broader market, with the Russell 2000 index of smaller companies gaining 1.1 per cent to 2,343.76.

Wendy’s jumped 25.9 per cent as it appeared to join a batch of companies favoured by individual investors taking cues from social media forums. Clover Health Investments soared 85.8 per cent. Other companies whose stock values have gyrated sporadically include AMC Entertainment, Blackberry and GameStop.

Cryptocurrency traders appeared to be in a selling mood. Bitcoin and other popular digital currencies, including Ethereum and Dogecoin, all fell sharply, according to Coindesk. Bitcoin, which climbed above USD60,000 early this year, slid seven per cent to USD32,690.

Shares in Fastly, an Internet cloud services provider, climbed 10.8 per cent after it said it had addressed an internal problem that caused dozens of websites around the globe to go down briefly, including the home page of Britain’s government and The New York Times.