Asian stocks are split, with China gaining an edge over US inflation data

Asian stocks are split, with China gaining an edge over US inflation data

Following a mixed day in Asia, European stocks climbed on Wednesday ahead of the release of US inflation data. Futures in the United States and oil prices were also higher.

Asian stocks are split, with China gaining an edge over US inflation data

In many countries, rising inflation is driving central banks and governments to reduce the support given to markets and businesses during the pandemic’s peak. As a result, investors are modifying their asset allocations to reflect the shifting policy environment.

Consumer inflation for April will be released by the Labor Department on Wednesday. Price movements influence Federal Reserve interest rate raise policy, which can limit economic growth by making borrowing more expensive.

Germany’s DAX jumped 1.1% to 13,679.24 and the CAC 40 in Paris surged 2.1% to 6,242.50. Britain’s FTSE 100 advanced 1.3% to 7,334.70.

Chinese shares rose after the government reported lower-than-expected price increases for the month of April. In annual terms, inflation was at 2.1%. Prices rose 0.4% from the previous quarter.

The future for the S&P 500 rose 1.1% and that for the Dow industrials gained 0.9%. Stocks ended mixed on Wall Street Tuesday after a rally in technology companies helped reverse most of an early slide. The S&P 500 wound up 0.2% higher while the Dow Jones Industrial Average fell 0.3%. The Nasdaq composite rose 1%.

The moderation of price increases gives authorities more room for stimulus spending to counter the impact of shutdowns in many major cities to fight coronavirus outbreaks.

Hong Kong’s Hang Seng rose 1% to 19,824.57 and the Shanghai Composite index climbed 0.8% to 3,058.70.

“In the context of the inflation landscape elsewhere in the world, China is in a very sweet spot at the moment, markets today are pricing that it gives China’s government room to unleash some juicy stimulus,” Jeffrey Halley of Oanda said in a commentary.

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