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World shares mixed as Yellen meets with officials in Beijing

BANGKOK (AP) – European shares opened mostly higher yesterday following a broad retreat in Asia as investors watched for updates from United States (US) Treasury Secretary Janet Yellen ‘s visit to Beijing.

US futures were little changed and oil prices were modestly higher.

Yellen is meeting with senior Chinese officials to try to soothe antagonisms over a host of issues and promote global financial stability.

US officials have said they do not expect a breakthrough during Yellen’s visit.

Germany’s DAX gained 0.2 per cent to 15,551.91 while the CAC 40 advanced 0.3 per cent to 7,101.70. Britain’s FTSE 100 lost 0.3 per cent.

The futures for the Dow Jones Industrial Average and S&P 500 were 0.1 per cent lower. On Thursday, the Dow dropped 1.1 per cent and the S&P 500 lost 0.8 per cent. The Nasdaq composite gave up 0.8 per cent.

In Asian trading, Tokyo’s Nikkei 225 shed 1.2 per cent to 32,388.42 and the Hang Seng in Hong Kong dropped 0.9 per cent to 18,365.70. The Shanghai Composite index lost 0.3 per cent to 3,196.61, while Australia’s S&P/ASX 200 sank 1.7 per cent to 7,042.30.

A person walks in front of an electronic stock board at a securities firm in Tokyo. PHOTO: AP

India’s Sensex sank 0.6 per cent and Bangkok’s SET index was little changed.

A jobs report yesterday will likely have a much bigger impact on Wall Street than anything else this week.

While a sturdy US labour market keeps the economy out of a long-feared recession, it could also push the Federal Reserve (Fed) to keep interest rates higher for longer in its campaign to defeat high inflation.

That in turn could mean more pressure down the line on the economy and financial markets worldwide.

A report on Thursday from ADP Research Institute suggested hiring by American private employers was much stronger last month than economists expected, with nearly twice as many jobs created than forecast.

Another report showed the number of US workers applying for unemployment last week remains low relative to history, even if it was a bit higher than expected.

The Fed has raised its federal funds rate by five percentage points from virtually zero in the past year, trying to smother the worst inflation in decades by slowing the entire economy.

“As the growth trajectory of the US economy improves, it becomes increasingly more challenging to envision what would cause the Fed to CUT rates anytime soon, as many market participants have been anticipating,” Stephen Innes of SPI Asset Management said in a commentary.

Yields jumped in the bond market as traders ramped up bets for the Fed to keep rates higher for longer than previously expected. Hopes for a potential cut to interest rates by early next year diminished.

In other trading yesterday, US benchmark crude oil added 22 cents to USD72.02 per barrel in electronic trading on the New York Mercantile Exchange. It gained 1 cent to USD71.80 on Thursday.

Brent crude, the pricing basis for international trading, picked up 18 cents to USD76.70 per barrel.

The dollar slipped to JPY143.06 from JPY144.06. The euro rose to USD1.0888 from USD1.0890.