Asian markets mixed after US retail data boosts Wall Street
May 18 2022 09:37 PM
An external view of the Tokyo Stock Exchange. The Nikkei 225 closed up 0.9% to 26,911.20 points yest
An external view of the Tokyo Stock Exchange. The Nikkei 225 closed up 0.9% to 26,911.20 points yesterday.

AFP / Hong Kong

Asian stocks were mixed yesterday following a strong start in some markets, which took the lead from Wall Street where traders were cheered by brisk US retail sales data.
The US Federal Reserve’s tightening of monetary policy to contain surging inflation has sent jolts through global markets, deepening the apprehensions of investors already roiled by China’s Covid-19 lockdowns and the Russian invasion of Ukraine.
But there was some good news out of the United States, with data showing increased spending by Americans in April.
Retail sales rose 0.9% — partly boosted by a rebound in auto purchases.
“The economy is slowing but the consumer still looks good and that means the economy is still positioned to avoid a recession,” said Edward Moya of OANDA.
Industrial production also rose in April — “another sign the economy isn’t falling apart just yet”, he added.
Wall Street closed with gains, with the tech-rich Nasdaq jumping nearly 3%.
Tokyo, Sydney and Singapore stayed up in Wednesday’s trade thanks to the bounce in New York, while Hong Kong and Shanghai between red and green.
The US consumer data added to the boost earlier this week from China, where authorities said Shanghai — the economic engine of the world’s second-largest economy — will “gradually reopen” businesses.
Most of the city’s 25mn people were placed under lockdown for weeks as authorities battled a major virus outbreak.
Millions were still confined to their homes Wednesday as confusion abounded over official statements about achieving zero Covid cases.
But just the indication of an easing was enough to cheer markets, which have been rattled by concerns about the impact of China’s lockdowns on the global economy — especially with snarled supply chains.
Communist leaders also held a rare meeting on Tuesday with tech executives to express support for a sector Beijing had cracked down on before Covid started inflicting economic wounds.
“Although investors are aware that there won’t be many punitive measures for tech from now, Covid concerns will continue to depress valuations across the board,” Hou Anyang, fund manager at Frontsea Asset Management, told Bloomberg.
Central banks around the world are concerned about skyrocketing prices, and on Tuesday Federal Reserve Chair Jerome Powell said there needs to be “clear” evidence that inflation is coming down before efforts to cool the economy can be pulled back.
He acknowledged that it may be a “bumpy” ride that would inflict some pain.
His comments were in line with market expectations, said Stephen Innes of SPI Asset Management.
“Still, the debate is evolving among the active trading community from recessionary capitulation mode to one that is short and not a particularly deep recession,” he said. “So while this is a tacit acceptance that the Fed is in catch-up mode and is prepared to constrain demand to get inflation down, they are unlikely to do it in a jackhammer fashion.”
Across the Atlantic, Britain’s annual inflation rate surged to a 40-year high at 9.0% for April, according to a statement from the Office for National Statistics on Wednesday. London slid at the open, while Frankfurt and Paris wavered.
Hong Kong Hang Seng Index closed up 0.2% to 20,644.28 points; Shanghai Composite ended down 0.3% to 3,085.98 points and  Tokyo Nikkei 225 closed up 0.9% to 26,911.20 points yesterday.

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