Global shares were mixed on Wednesday as the wait-and-see mood set off another day of – albeit more modest – sell-off on Wall Street.
Worries about inflation are weighing heavily on investors’ minds, including in Asia. Singapore’s inflation data released earlier this week showed that inflation is still going strong, with core inflation 4.8 per cent higher than the same period last year in July. Food price inflation stood at 6.1%.
Benchmarks are lower in Japan and China, while in Australia and South Korea are higher. European shares fell in early trading.
France’s CAC 40 lost 0.3% in early trading to 6,345.04. Germany’s DAX fell 0.3% to 13,150.83. Britain’s FTSE 100 fell 0.5% to 7,451.34. US shares edged lower with Dow futures down less than 0.1% at 32,891.00 and S&P 500 futures down 0.1% to 4,126.25.
In the US, a report on new homes also stoked pessimism about a possible recession. A slowing US economy will have a big impact on export-dependent Asia.
The next big event circled on the calendar is Friday’s speech by Jerome Powell, chairman of the US Federal Reserve. He will speak at an annual Fed symposium in Jackson Hole, Wyoming, which has been the site of major market-moving speeches in the past.
“As we approach the Jackson loss, economic risks seem to manifest in various forms, from disappointments in housing data to manufacturing surveys, said Tan Boon Heng at Mizuho Bank in Singapore. ” said Tan Boon Heng at Mizuho Bank in Singapore.
Japan’s benchmark Nikkei 225 fell 0.5% to 28,313.47. Australia’s S&P/ASX 200 rose 0.5% to 6,998.10. South Korea’s Kospi rose 0.5% to 2,447.45. Hong Kong’s Hang Seng fell 1.2% to 19,268.74, while the Shanghai Composite fell 1.9% to 3,215.20.
Uncertainty has returned to Wall Street after a strong summer as worries grow about how aggressively the US Federal Reserve will raise interest rates to reduce high inflation. Recent comments by some Fed officials have cooled hopes the Fed might end more gently than feared.
A report showed new home sales were slower than economists expected last month. The housing industry has been one of the hardest hit by the change in interest rates this year. As the Fed raised its key interest rate overnight, mortgage rates also rose and caused a chill in the industry.
Such weak data on the US economy stoked fears that a recession may indeed be on the way, but it could also encourage the Fed to make it easier to raise interest rates. Worries about a slowing economy spread across the world and the value of a euro fell below $1 amid concerns about Europe in particular.
In energy trading, the price of U.S. benchmark crude rose 74 cents to $94.48 a barrel. Brent crude, the international standard, rose 76 cents to $100.98 a barrel.
In currency trading, the US dollar inched down to 136.50 Japanese yen from 136.72 yen. The euro was little changed at 99 cents.
AP Business Writers Damian J. Troise and Stan Choe contributed