World News | Asian stocks modestly higher, inflation data in focus

TOKYO, April 12 (AP) Asian stocks were mostly higher on Wednesday, as markets focused on key inflation data that could affect the Federal Reserve’s interest rate stance.

Japan’s benchmark Nikkei 225 rose 0.6 percent to 28,096.74 in early trade. Australia’s S&P/ASX 200 index rose 0.6% to 7,352.10. South Korea’s Kospi edged down less than a point to 2,547.27.

Read also | A New York urologist has been accused of sexually abusing patients, including minors.

Hong Kong’s Hang Seng fell 0.7 percent to 20,345.23 and the Shanghai Composite rose 0.3 percent to 3,322.39.

“The broader market remains highly focused on this week’s key inflation data as market participants try to sort out the state of the economy and the likely course the Fed may take,” Stephen Innes, managing partner at SPI Asset Management, said in a note.

Read also | Myanmar’s junta has confirmed a deadly air strike on a village in Sagaing province, killing more than 100 people.

On Wall Street, the S&P 500 posted its smallest one-day gain in more than a year, falling 0.17 point, or less than 0.1%, to 4,108.94. Most stocks in the index rose, with the Dow Jones Industrial Average up 0.3% to 33,684.79. The Nasdaq Composite fell 0.4% to 12,031.88.

The biggest immediate question facing Wall Street is whether the Fed will keep raising interest rates in an attempt to rein in high inflation. It already raised interest rates at a staggering pace last year, enough to slow some parts of the economy and strain the banking system.

Economists expect Wednesday’s consumer inflation report to show inflation slowed to 5.2% in March from 6% in February. That’s continued progress since inflation peaked last summer, but remains well above the Fed’s target.

The higher-than-expected reading could boost expectations that the Federal Reserve will raise interest rates by 25 percentage points at its next meeting in May. Higher interest rates can dampen inflation, but while slowing economic growth, they increase the risk of recession and hurt the prices of stocks and other investments.

Bond traders have been concerned that the Fed could go too far with interest rates and then have to cut them as soon as possible this summer to prop up the economy. Stocks have remained more resilient, buoyed by hopes that the Federal Reserve will be able to raise interest rates and raise rates to curb inflation without triggering a deep recession.

Mark Haefele, chief investment officer at UBS Global Wealth Management, said: “While navigating the volatile market narrative is not easy, it helps that rates reflect a more pessimistic view than equities, which tend to be more optimistic Prospects.”

Inflation remains stubbornly high, one of the reasons analysts expect the upcoming earnings season to be marked by the worst decline since the height of the pandemic in 2020. A number of banks will tell investors on Friday how much will help kick off earnings season as they made money in the first three months of the year.

Investors will receive updates on the CEO’s views on current and future conditions. One concern is that banks in particular may scale back lending following turmoil in their industry, in part due to a rapid surge in interest rates last year.

If they do cut off lending to businesses, that could slow the economy further and increase the risk of a recession.

Shares of CarMax rose 9.6% after CarMax reported profit that beat analysts’ expectations for its latest fiscal quarter ended Feb. 28.

The loser was Moderna, which said its potential flu vaccine needed more research in late-stage clinical trials, with shares down 3.1%.

Big technology stocks were also weak. They and other high-growth stocks are seen as most exposed to rising interest rates, with Microsoft’s 2.3 percent drop the biggest drag on the S&P 500 .

In energy trading, benchmark U.S. crude oil was down 1 cent at $81.52 a barrel in electronic trading on the New York Mercantile Exchange. It rose $1.79 to $81.53 a barrel. International standard Brent crude rose 2 cents to $85.63 a barrel.

In currency trading, USD/JPY rose to 133.83 from 133.70. The euro traded at $1.0922, up from $1.0912. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)