SINGAPORE – Asia-Pacific shares fell on Wednesday as investors digested China’s inflation data and looked ahead to the US CPI report.
Markets in mainland China fell, with the Shanghai Composite slightly lower and the Shenzhen Component down 0.32%.
China’s producer price index in July rose 4.2 percent from a year ago, below the 4.8 percent rise expected in a Reuters poll.
Consumer prices rose 2.7% in July compared to the same period in 2021, the most since July 2020. Analysts had expected printing to stand at 2.9%.
“Underlying inflationary pressures remain contained in China as sporadic lockdowns have weighed on consumer spending and overall economic activity,” Carol Kong, senior associate for international economics and currency strategy at the Commonwealth Bank, wrote in a Wednesday note before data release.
“China’s relatively soft inflationary momentum contrasts with persistently strong US inflation,” the note said.
Later on Wednesday, the US will also release inflation data. Economists forecast consumer inflation to reach 8.7%, compared with 9.1% in June, according to Dow Jones.
Asia Pacific markets fall
The The Nikkei 225 in Japan fell 0.61%, while the Topix index fell 0.18%.
In South Korea, the Kospi fell 0.69% and the Kosdaq fell 0.89%.
Australia’s S&P/ASX 200 lost 0.1%.
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Hong Kong’s Hang Seng Index fell 0.54%.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.48%.
In company news, Toyota Motor announced that it would suspend some production operations due to positive cases of Covid in the workplaces.
Cathay Pacific and Honda Motor were among the companies that reported earnings on Wednesday.
Overnight in the United States, the Nasdaq Composite fell more than 1% to 12,493.93. The Dow Jones Industrial Average lost 58.13 points, or 0.18%, to 32,774.41, while the S&P 500 fell 0.42% to 4,122.47.
Coins and oil
A strong inflation impression is likely to reinforce the idea that the Fed is not close to stopping its tightening cycle and that markets will readjust their expectations about U.S. interest rates, Kong added. Commonwealth Bank.
“A resurgence in FOMC rate expectations may help the USD recover, especially against the JPY, which is sensitive to changes in US Treasuries.”
The Japanese yen traded at 135.16 to the dollar, remaining weaker since the US payrolls report. The Australian dollar was at $0.6957.
US crude futures were down 0.13% at $90.38 a barrel, while Brent crude futures were around $96.31 a barrel.
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