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Global markets mixed, headed for annual loss

BEIJING (AP) – Asian stocks rose yesterday while Europe opened lower as most major markets headed for big annual losses following a year that was roiled by the invasion of Ukraine and interest rate hikes to cool surging inflation.

Shanghai and Tokyo advanced. London and Frankfurt declined. US futures were lower heading into Wall Street’s final trading day of 2022. Oil prices fell back.

Wall Street’s benchmark S&P 500 index gained on Thursday after the number of people applying for unemployment benefits rose only slightly last week despite interest rate hikes to cool inflation by slowing economic activity.

“Considering the market news was sparse, the shift higher has the hallmarks of a dead cat bounce,” said Stephen Innes of SPI Asset Management in a report.

In early trading, the FTSE in London lost 0.4 per cent to 7,483.42. It is on track to become the only major market with a gain for 2022, rising about one per cent for the year.

Other markets are set for annual losses after Russia’s attack on Ukraine pushed up oil and wheat prices and the Federal Reserve and other global central banks hiked rates to slow economic activity and cool inflation that is at multi-decade highs.

China’s shutdown of Shanghai and other cities to fight COVID-19 outbreaks disrupted manufacturing and shipping.

The DAX in Frankfurt shed 0.6 per cent to 13,996.57. It is headed for a 12 per cent loss in 2022. The CAC-40 in Paris declined 0.5 per cent to 6,539.21. It is down 9.5 per cent for the year.

On Wall Street, the S&P 500 future was off 0.4 per cent. That for the Dow Jones Industrial Average declined 0.3 per cent.

On Thursday, the S&P 500 rose 1.7 per cent. It will end the year down about 20 per cent, which would be its biggest annual decline since 2008.

The Dow gained one per cent and the Nasdaq composite added 2.6 per cent. Both are headed for annual losses.

In Asia, the Shanghai Composite Index gained 0.5 per cent to 3,089.25. The Chinese benchmark is on track to end 2022 down more than 14 per cent after the world’s second-largest economy was depressed by anti-virus controls and a crackdown on corporate debt.

Tokyo’s Nikkei 225 finished unchanged at 26,094.50. It is headed for an annual loss of almost 10 per cent. The Hang Seng in Hong Kong added 0.2 per cent to 19,781.41. It is off more than 14 per cent this year.

Sydney’s S&P-ASX 200 was 0.3 per cent higher at 7,038.70. India’s Sensex opened up 0.3 per cent at 61,133.88. New Zealand declined while Southeast Asian markets rose.

South Korean markets were closed for a holiday. The country’s benchmark Kospi index is headed for a loss of more than 25 per cent for the year.

Investors worry central banks are willing to cause a recession if necessary.

The Fed’s key lending rate stands at a range of 4.25 per cent to 4.5 per cent after seven increases this year. The US central bank forecasts that will reach a range of 5 per cent to 5.25 per cent by the end of 2023. Its forecast doesn’t call for a rate cut before 2024.

In energy markets, benchmark U.S. crude fell 50 cents to USD77.90 per barrel in electronic trading on the New York Mercantile Exchange.

The contract fell 56 cents on Thursday to USD78.40. Brent crude, used as the price basis for international oil trading, gave up 36 cents to USD83.10 per barrel in London. It lost USD1 the previous session to USD82.26 a barrel.