Business

Stocks fall, China’s consumer inflation rises


SINGAPORE – Asia-Pacific shares fell on Wednesday as investors digested inflation data from China and reviewed the US CPI report.

From Hong Kong Hang Seng Index fell 1.96% to close at 19,610.84, with the Hang Seng Tech index down 2.83%. Heavyweight Meituan and JD.com decreased by 3.64% and 4.46% respectively.

Healthcare, consumer and real estate stocks also dragged the Hang Seng lower, according to Eikon data.

Real estate developer Longfor fell 16.4% after the company reported that contract sales in the first seven months of the year increased by nearly 58% year-over-year.

Mainland China market slipped, with Shanghai Composite 0.54% lower at 3,230.02, and Shenzhen Ingredients down 0.87% at 12,223.51.

China’s producer price index rose 4.2 percent in July from a year ago, lower than the 4.8 percent gain predicted in a Reuters poll.

Consumer prices in July increased by 2.7% over the same period in 2021, the most since July 2020. Analysts predict the print will stand at 2.9%.

Carol Kong, senior associate, international economist and currency strategist at Commonwealth Bank, wrote in a note Wednesday ahead of the data release: “Primary inflationary pressures remain limited in China. as sporadic lockdowns hit consumer spending and overall economic activity.

“China’s relatively subdued inflationary impulse contrasts with persistently strong US inflation,” the note said.

Later Wednesday, the US will also report inflation data. Economists expect consumer inflation to stay at 8.7%, compared with 9.1% in June, according to Dow Jones.

Asia-Pacific markets fell

The Nikkei 225 in Japan fell 0.65% to close at 27,819.33, while the Topix index fell 0.17% to 1,933.65.

In Korea, Kospi fell 0.9% to 2,480.88 and Kosdaq fell 1.6% to 820.27.

of Australia S&P / ASX 200 lost 0.53% to 6,992.7.

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MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.24%.

In company news, Toyota Motor announced that it will suspend some production operations due to positive Covid cases at the work site.

Cathay Pacific and Honda Motor were among the companies that reported earnings on Wednesday.

Stocks of Hong Kong Cathay Pacific up about 1% after the carrier reported a narrower loss in the first half of 2022 compared with the same period in 2021. Revenue rose 17% to HK$18.6 billion ($2.36 billion).

Overnight in the state, the Nasdaq Composite fell more than 1% to 12,493.93. The Dow Jones Industrial Average lost 58.13 points, or 0.18%, to 32,774.41, while the S&P 500 fell 0.42% to 4,122.47.

Currency and oil

The US Dollar Indextracks the greenback against its basket of currencies, at 106.329, holding below 106.5.

The strong inflation news is likely to reinforce the idea that the Fed has yet to pause its tightening cycle and that markets will adjust their expectations for US interest rates, Commonwealth Bank’s Kong added.

“Expectations of a revived FOMC rate could help USD recover, especially against JPY, which is sensitive to changes in US Treasuries.”

The Japanese yen was trading at 135.01 per dollar, still weaker since the strong US payrolls report. The Australian dollar is $0.6970.

US crude oil futures down 0.74% at $89.83 per barrel, while Brent Crude Oil Futures down 0.53% to 95.80 USD/barrel.



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