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Asian stocks mixed, Europe opens higher as investors fret over inflation

HONG KONG (AFP) – Asian stocks were mixed yesterday, following a volatile day on Wall Street with investors concerned about surging inflation and see-sawing crude prices.

Equities have been on a roller coaster ride in recent weeks, fuelled by worries about inflation, the Russian invasion of Ukraine, and the impact of China’s Covid-19 lockdowns on global supply chains.

Global investors were spooked by China’s sinking April exports – the lowest in almost two years – as well as data showing that its consumer inflation had risen at its quickest pace in nearly half a year.

Some are preparing for the worst.

“Equity investors are positioning for a recession; that pressure will remain acute until they see calming in rate volatility,” said Stephen Innes of SPI Asset Management.

“The market seems to be fighting too many things to find its footing… The unavoidable growth concerns related to China are leaving a colossal contagion footprint across a plethora of global assets.”

Millions across China – particularly in its economic engine Shanghai – have been under lockdown for weeks, while Covid restrictions have crept up in the capital Beijing.

The World Health Organization (WHO) on Tuesday said Beijing’s zero-Covid strategy is not sustainable given the emergency of highly contagious variants of the coronavirus.

The strict policy has stopped up ports and factories, while inciting rare outrage from residents who have been forced to stay at home with no end in sight.

In New York, the Dow fell for the fourth straight day at Tuesday’s close, while the broader S&P 500 edged up. The Nasdaq jumped one per cent.

Asian markets were also mixed yesterday.

Tokyo and Sydney rose, but Seoul and Singapore dipped.

In early European trade, however, London, Paris and Frankfurt made slight gains.

All eyes are now on the release of the US consumer price index report for April.

Sentiment on trading floors has been buoyed by US President Joe Biden saying his administration is discussing lifting trade tariffs on China to try and control inflation.

“That has given US equity futures a leg up today,” senior market analyst at OANDA Jeffrey Halley said in a note yesterday.

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