Asian stocks slide after Chinese inflation data surprise to the upside

BANGKOK (AP) – Stocks fell on Friday in most Asian markets after China reported a stronger-than-expected price increase that could prompt authorities to take steps to cool inflation. Japan’s benchmark Nikkei 225 index rebounded after falling the day before. Shares fell in Hong Kong, Shanghai, Sydney and Seoul.

On Thursday, stocks closed moderately higher on Wall Street, driven by gains from big tech companies benefiting from lower bond yields. But a surge in jobless claims dampened some of the shopping enthusiasm. China reported that consumer prices rose in March due to a rise in fuel prices, while producer prices rose at the fastest pace in more than four years. The consumer price index rose 0.4% in March compared to minus 0.2% in February, as fuel prices rose almost 12% from the previous year. Prices paid by manufacturers were up 4.4% over the previous year. Inflation reflects rising demand as China’s economy leads the global recovery from the pandemic. Concerns that stronger growth could spur inflation that regulators in many major economies would later move to cool, in part by raising interest rates, have been dominating markets for the past few months. Added to that, a new round of US sanctions, this time against seven Chinese supercomputer makers, has rekindled concerns about trade friction between the two largest economies, Oanda’s Jeffrey Halley said. “Asian markets are once again taking a more cautious stance today. Geopolitics is never far from the surface, even if it is often lost in the noise of global recovery, ”Halley said in a report. The SHCOMP index of Shanghai Composite, -0.77% lost 0.7% and the Hang Seng in Hong Kong HSI, -0.78% also fell 0.7%. Australia’s S & P / ASX 200 XJO, -0.17%, was down 0.2%, and the Kospi 180721, -0.14% in Seoul, was down 0.2%. Japan’s Nikkei 225 NIK, + 0.65%, was up 0.5%. Shares of Sony Corp. SONY, up -0.94%, rose 2.7% after the company signed an exclusive movie distribution agreement with Netflix NFLX, up + 1.39%. On Thursday, the S&P 500 SPX Index, + 0.42%, gained 0.4% to 4,097.17, another record after the records set on Monday and Wednesday. The Dow Jones Industrial Average DJIA, + 0.17%, gained 0.2%, to 33,503.57. The high-tech Nasdaq Composite COMP rose 1% to 13,829.31. Small business stocks, which have been outperforming the broader market this year, also performed well. The Russell 2000 RUT index, + 0.88% for smaller companies, rose 0.9% to 2,242.60. The index is up 13.6% so far this year, while the S&P 500, which tracks large companies, is up 9.1%. Stocks have benefited this week as bond yields, which had been rising steadily, fell back from highs reached earlier in the month. The yield on the 10-year US Treasury note TMUBMUSD10Y, 1.639%, which influences interest rates on mortgages and other loans, fell to 1.63% from 1.65% on Wednesday night. It had been as high as 1.75% on Monday. That pullback in yields took some pressure off tech stocks, which have slipped in recent months as yields surged, making those stocks look expensive. The sector has also seen choppy trade as investors transfer more money to companies that can benefit from the economic recovery. Apple AAPL, + 1.92% rose 1.9%, Microsoft MSFT, + 1.34% gained 1.3% and Amazon AMZN, + 0.61% added 0.6%. Investors are cautious optimism about the economic recovery, especially in the U.S., where vaccine distribution has increased and President Joe Biden has pushed the deadline for states to make doses available to all adults until April 19th. A long way to go. The number of Americans who applied for unemployment benefits last week increased again last week as many businesses remain closed or partially closed due to the pandemic. Speaking to the International Monetary Fund on Thursday, Federal Reserve Chairman Jerome Powell said several factors are putting the nation “on the right track to allow for a full reopening of the economy quite soon.” In other trading, US benchmark crude oil CL.1, + 0.08% was up 11 cents to $ 59.71 a barrel in electronic trading on the New York Mercantile Exchange. It lost 17 cents to $ 59.60 on Thursday. Brent BRN00 crude, -0.09%, the international standard, fell 2 cents to $ 63.18. The US dollar rose to 109.32 Japanese yen USDJPY, + 0.08% from 109.25 yen. The euro EURUSD, -0.13% fell to $ 1.1904 from $ 1.1917.