Global stocks rise after US inflation cools

Global stocks rise after US inflation cools

Global stock markets rose on Friday after US inflation eased in March and China reported unexpectedly strong exports.

London and Frankfurt opened higher. Shanghai, Tokyo and Hong Kong advanced. Oil prices rose.

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Asian markets were “taking cues from a solid rally on Wall Street,” said Anderson Alves of ActivTrades in a report.

In early trading, the FTSE 100 in London gained 0.2 per cent to 7,862.09. The DAX in Frankfurt advanced 0.2 per cent to 7,843.38 and the CAC 40 in Paris was 0.2 per cent higher at 7,497.61.

On Wall Street, the future for the benchmark S and P 500 index was off 0.2 per cent. That for the Dow Jones Industrial Average was down 0.3 per cent.

On Thursday, the S and P 500 rose 1.3 per cent after government data showed prices paid to US producers in March rose at their slowest rate in more than two years.

The Dow advance 1.1 per cent. The Nasdaq jumped 2 per cent to 12,166.27.

In Asia, the Shanghai Composite Index closed up 0.6 per cent at 3,338.15 after China’s March exports rose 14.8 per cent over a year earlier, rebounding from a decline in January and February.

The Nikkei 225 in Tokyo jumped 1.2 per cent to 28,493.47. The Hang Seng in Hong Kong added 0.5 per cent to 20,438.81.

The Kospi in Seoul advanced 0.4 per cent to 2,571.49. Sydney’s S and P-ASX 200 was 0.5 per cent higher at 7,361.60.

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New Zealand declined while Singapore and Jakarta gained. Indian markets were closed for a holiday.

Traders hope signs that stubbornly high inflation is weakening might prompt the Federal Reserve and other central banks to postpone or scale back plans for interest rate hikes to cool business and consumer activity.

Government data on Thursday showed prices paid to US producers rose 2.7 per cent over a year earlier, the smallest gain in more than two years.

On Wednesday, separate data showed consumer inflation slowed to 5 per cent from February’s 6 per cent.

Another report on Thursday said slightly more American workers applied for unemployment benefits last week than expected, though the job market has remained resilient.

Notes from the Fed’s March 21-22 meeting showed members agreed its next rate hike would be one-quarter percentage point instead of a half-point.

Some traders are betting the Fed might keep its benchmark lending rate steady at its May meeting.

Others expect the US central bank to start cutting rates as early as mid-year to shore up the economy. Fed officials have said they expect at least one more increase this year and then for the benchmark rate to stay elevated through at least early 2024.

Meanwhile, big US companies are starting to tell investors how much they earned during the first three months of the year.

Expectations are low. Forecasts call for the sharpest drop in earnings since the pandemic was pummelling the economy in 2020.

The biggest banks are due to report results following a flurry of anxiety about the industry after two high-profile failures in the United States and one in Switzerland. That stirred fears banks were cracking under the strain of rate hikes. Regulators appear to have soothed that unease by promising more lending to institutions and other steps if needed.

Notes from the Fed meeting said its staff economists see such weakness potentially causing a mild recession later this year.

In energy markets, benchmark US crude edged up 3 cents to USD 82.19 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell USD 1.10 on Thursday to USD 82.16.

Brent crude, the price basis for international oil trading, gained 1 cent to USD 86.10 per barrel in London. It lost USD 1.24 the previous session to USD 86.09.

The dollar fell to 132.45 yen from Thursday’s 132.77 yen. The euro gained to USD 1.1060 from USD 1.1046.