World Shares Mostly Gain Thursday 08/11 05:33
World shares were mixed Thursday after Wall Street benchmarks closed at
three-month highs as investors cheered a report showing inflation cooled more
than expected in July.
BANGKOK (AP) -- World shares were mixed Thursday after Wall Street
benchmarks closed at three-month highs as investors cheered a report showing
inflation cooled more than expected in July.
U.S. futures edged higher and oil prices also advanced.
The U.S. government said Wednesday that consumer inflation jumped 8.5% in
July from a year earlier. But that was down from June's four-decade high of
Germany's DAX edged 0.2% lower, to 13,674.98, while in Paris the CAC 40
added 0.1% to 6,531.38. Britain's FTSE 100 slipped 0.1% to 7,498.34. The
futures for the S&P 500 and the Dow Jones Industrial Average were 0.2% higher.
On Wednesday, the S&P 500 surged 2.1% on expectations that slower inflation
will mean the Federal Reserve may moderate its interest rates hikes. Technology
stocks, cryptocurrencies and other investments that have been among the year's
biggest losers due to the Fed's aggressive rate hikes led the way.
The Nasdaq composite, whose many high-growth and expensive-looking stocks
have been particularly vulnerable to interest rates, jumped 2.9% while the Dow
industrials advanced 1.6%.
Asian markets also took heart. Hong Kong's Hang Seng index added 2.4% on
Thursday to 20,082.43, while the Shanghai Composite index gained 1.6%, to
3,281.67. The Kospi in Seoul rose 1.7% to 2,523.78. In Australia, the S&P/ASX
200 climbed 1.6% to 7,071.00. Taiwan's Taiex was up 1.7%.
Tokyo's markets were closed for a holiday.
In Thailand, the SET gave up 0.2% after the country's central bank raised
its benchmark interest rate by 0.25 percentage points to 0.75% a day earlier.
The Southeast Asian country's economy has been hard hit by the pandemic, which
ravaged its all-important tourism sector.
Despite the improved U.S. inflation reading, analysts warned the war on
higher prices is not over.
"It's of course great to see the latest inflation print come
lower-than-expected, but first, one data point doesn't make a trend, and we had
a similar surprise earlier this year, but then inflation spiked to fresh
multi-decade highs the following month," Ipek Ozkardeskaya of Swissquote Bank
said in a report.
She noted that softer energy prices were the main factor tempering
inflation, while prices for food, housing and wages pushed higher.
Gasoline prices paid by American drivers dipped to just under the $4 mark
for the first time in more than five months -- good news for consumers who are
struggling with high prices for many other essentials.
The AAA auto club said the national average for a gallon of regular was
$3.99 on Thursday. The shopping app GasBuddy reported that the national average
was already down to $3.98 on Wednesday.
The inflation data encouraged traders to scale back bets for how much the
Fed will raise interest rates at its next meeting. Interest rates help set
where prices go across financial markets and higher rates tend to pull down
prices for everything from stocks to commodities to crypto.
Other reports this week will show how inflation is doing at the wholesale
level and whether U.S. households are still ratcheting down their expectations
for coming inflation, an influential data point for Fed officials.
Recession worries have built as the highest inflation in 40 years squeezes
households and corporations around the world. Wall Street is closely watching
to see if the Fed can succeed in hitting the brakes on the economy and cooling
inflation without veering into a recession.
The Federal Reserve will get a few more highly anticipated reports before
its next announcement on interest rates, on Sept. 21. They could also alter its
stance. Those include data on hiring trends across the economy, due Sept. 2,
and the next update on consumer inflation, coming on Sept. 13.
In other trading, U.S. benchmark crude oil 19 cents to $92.12 per barrel in
electronic trading on the New York Mercantile Exchange. It gained $1.43 to
$91.93 on Wednesday.
Brent crude, the basis for international pricing, picked up 15 cents to
The U.S. dollar slipped to 132.62 Japanese yen from 132.93 yen late
Wednesday. The euro rose to $1.0326 from $1.0300.