BEIJING (AP) — Asian stocks were mixed and European markets opened lower Tuesday ahead of a U.S. inflation update that traders hope will encourage the Federal Reserve to relax plans for more rate hikes. interest.
London, Frankfurt and Hong Kong fell. Shanghai and Tokyo rose. Oil prices fell.
Traders fear that repeated rate hikes by the Fed and other central banks to cool inflation, which is at multi-decade highs, could push the world into recession. They expect Thursday’s report on US consumer prices to show that inflation is moderating, reducing the need to slow economic activity further.
“Traders are again talking about a ‘soft landing,’ which could support risky stocks,” Anderson Alves of ActivTrades said in a report. If the data shows lower inflation in the US, “another mild wave could hit the markets”, helped by “diminishing recession fears”.
In early trade, London’s FTSE 100 lost 0.4% to 7,697.35. The DAX in Frankfurt lost 0.3% to 14,745.01 and the CAC 40 in Paris fell 0.6% to 6,863.40.
Futures for Wall Street’s benchmark S&P 500 index and the Dow Jones industrial average were down 0.2%.
On Monday, the S&P fell 0.1% and the Dow Jones lost 0.3%. The Nasdaq Composite gained 0.6%.
In Asia, the Shanghai Composite Index rose 0.4% to 3,169.50 while Hong Kong’s Hang Seng lost 0.3% to 21,331.46. Tokyo’s Nikkei 225 gained 0.8% to 26,175.56.
Seoul’s Kospi rose less than 0.1% to 2,351.31 and Sydney’s S&P-ASX 200 lost 0.3% to 7,131.00.
India’s Sensex sank 1% to 60,134.70. New Zealand gained while Southeast Asian markets fell.
Despite traders’ optimism, Fed officials say rates will need to stay elevated for an extended period to extinguish upward price pressure. The Fed’s benchmark lending rate is in a range of 4.25% to 4.50%, up from almost zero a year ago.
On Monday, Fed board members Mary Daly and Rafael Bostic snuffed out hopes of a rate cut this year. Daly said she expects the benchmark to be raised to more than 5%. Bostic said he will be there “for a long time.”
Forecasters expect Thursday’s report to show inflation slowed to 6.5% in December from 7.1% in November. That’s below June’s 9.1% peak, but well above the Fed’s 2% target.
There are also warnings about what appears to be lackluster corporate earnings when reporting season begins on Friday, as companies grapple with higher labor and other costs.
In energy markets, benchmark US crude lost 26 cents to $74.37 cents a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 86 cents to $74.63 on Monday. Brent crude, the base price for international oil trade, fell 30 cents to $79.35 a barrel in London. He made $1.08 the previous session at $79.65.
The dollar rose to 131.88 yen from 131.56 yen on Monday. The euro fell to $1.0735 from $1.0750.
