TOKYO (AP) – Global shares were mixed yesterday as a wait-and-see mood set in following another – though more modest – day of sell-offs on Wall Street.
Worries about inflation are weighing on investors’ minds, including in Asia. Inflation data for Singapore released earlier in the week showed inflation was still going strong, with core inflation headed higher to 4.8 per cent year-on-year for July. Food price inflation was at 6.1 per cent.
Benchmarks finished lower in Japan and China, while they were higher in Australia and South Korea. European shares fell in early trading.
France’s CAC 40 lost 0.3 per cent in early trading to 6,345.04. Germany’s DAX shed 0.3 per cent to 13,150.83. Britain’s FTSE 100 slid 0.5 per cent to 7,451.34. United States (US) shares were set to drift lower with Dow futures down less than 0.1 per cent at 32,891.00 and S&P 500 futures down 0.1 per cent to 4,126.25.
In the US, a report on new homes also set off pessimism about a possibly imminent recession. A slowdown in the American economy would be devastating for export-reliant Asia.
The next big event circled on the calendar is a speech tomorrow by chair of the US Federal Reserve Jerome Powell. He’ll be speaking at an annual symposium held by the Fed in Jackson Hole, Wyoming, which has been the site of major market-moving speeches in the past.
“As we approach Jackson hole, economic risks are seemingly revealing in various forms ranging from disappointment in housing data to manufacturing survey,” said Tan Boon Heng at Mizuho Bank in Singapore.
Japan’s benchmark Nikkei 225 slid 0.5 per cent to finish at 28,313.47. Australia’s S&P/ASX 200 added 0.5 per cent to 6,998.10. South Korea’s Kospi rose 0.5 per cent to 2,447.45.
Hong Kong’s Hang Seng dipped 1.2 per cent to 19,268.74, while the Shanghai Composite shed 1.9 per cent to 3,215.20.
Volatility has returned to Wall Street following what had been a strong summer as worries rise about how aggressively the Federal Reserve will raise interest rates to knock down high inflation. Recent comments from some Fed officials have cooled hopes the Fed may end up less forceful than feared.
A report showed that sales of new homes slowed more than economists expected last month. The housing industry has been one of the hardest hit by this year’s turnaround in interest rates. As the Fed jacked up its key overnight rate, mortgage rates climbed too and put a chill on the industry.
Such weak data on the US economy raises worries that a recession may indeed be on the way, but it also could encourage the Fed to take it easier on rate hikes. Worries about a slowing economy stretch around the world, and the value of EUR1 dropped below USD1 amid concerns about Europe in particular.
In energy trading, benchmark US crude rose USD0.74 to USD94.48 a barrel. Brent crude, the international standard, added USD0.76 to USD100.98 a barrel.
In currency trading, the US dollar inched down to JPY136.50 from JPY136.72. The euro cost was little changed at USD0.99 cents.
