TOKYO – Asian stock markets gained while Europe opened lower Wednesday ahead of U.S. inflation data that some investors worry might lead to more interest rate hikes.
Wall Street futures were lower. Oil prices rose $1 per barrel, rebounding from Tuesday's plunge.
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Investors were waiting for U.S. data on June consumer prices amid concern that global central bank action to cool surging inflation might derail economic growth.
Strong U.S. inflation “may cement the case” for the Federal Reserve to tighten policy, but traders might choose to “buy into the stance of peaking inflation” as oil prices fall, Yeap Jun Rong of IG said in a report.
In early trading, the FTSE 100 in London lost 1.2% to 7,119.53. The DAX in in Frankfurt sank 1.3% to 12,741.09 and the CAC 40 in Paris shed 1.1% to 5,979.84.
On Wall Street, futures for the benchmark S&P 500 index and the Dow Jones Industrial Average were off less than 0.1%.
The S&P 500 lost 0.9% on Tuesday, declining for a third day. Technology, health care and energy stocks accounted for a big share of losses. The Dow Jones Industrial Average slid 0.6% and the Nasdaq composite shed 0.9%.
In Asian trading, the Shanghai Composite Index gained less than 0.1% to 3,284.29 after June exports surged 17.9% and imports rose just 1% in a sign of weak demand. Tokyo’s Nikkei 225 added 0.5% to 25,478.77 while the Hang Seng in Hong Kong sank 0.2% to 20,797.95.
The Kospi in Seoul added 0.5% to 2,328.61 after the South Korean central bank raised its policy rate by an unprecedented margin of 0.5 percentage points to 2.25% to cool rising prices.
Sydney's S&P-ASX 200 gained 0.2% to 6,621.60 and India's Sensex advanced 0.6% to 53,591.66.
New Zealand advanced after the country's central bank lifted its benchmark interest rate by half a percentage point to 2.5%. Southeast Asian markets declined.
Big U.S. companies are due to report second-quarter results over the next few weeks.
Expectations appear subdued. Analysts are forecasting 5.1% growth for companies across the S&P 500, which would be the weakest since the end of 2020, according to FactSet.
U.S. inflation jumped as the economy recovered from the coronavirus pandemic.
Russia's invasion of Ukraine pushed up prices of oil and other commodities. Global manufacturing supply chains were disrupted by Chinese efforts to contain virus outbreaks that temporarily shut down Shanghai and other industrial centers.
The U.S. bond market is flashing warning signals of a possible recession.
The yield on the 10-year Treasury, or the difference between the market price and the payout at maturity, was steady at 2.98%. It is below the two-year Treasury yield, which indicates some investors expect a recession in the next year or two.
In energy markets, benchmark U.S. crude gained $1 to $99.84 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $8.25 on Tuesday to $95.84. Brent crude, the price basis for international trading, climbed $1.02 to $100.51 per barrel in London. It fell $7.61 the previous session.
The dollar rose to 137.14 yen from Tuesday's 136.77 yen. The euro edged down to $1.0035 from $1.0045.