Stock markets swayed on Friday after US data showed a stronger-than-expected rise in wholesale inflation and traders weighed the likelihood of more rate hikes this year.
According to government data released on Friday, wholesale prices in the United States rose in July due to a rise in the cost of services.
US markets ended the day mixed, with the tech-rich Nasdaq Composite Index falling 0.6 percent to close the week at 13,644.85.
While producer prices have fallen rapidly since last year, consumer inflation has slowed, prompting a mixed reaction from financial markets.
“We had inflation data that came in higher than expected, but the market was surprised because yesterday’s (consumer) inflation data came in lower than expected,” Adam Sarhan of 50 Park Investments told AFP.
“So the market likes certainty and right now we’re seeing a lot of uncertainty around inflation,” he added.
European stocks ended the trading week sharply lower, as did the Hang Seng and Shanghai composite indices.
– “On track for a soft landing” –
In the UK, better-than-expected growth data on Friday raised the likelihood of another rate hike by the Bank of England, giving the pound a temporary boost.
Gross domestic product grew 0.2 percent in the April-June period thanks to strong production in June and despite persistently high inflation, the Bureau for National Statistics said in a statement.
“Today’s GDP data builds on the idea that the UK may be on track for a soft landing, much like the US is doing right now,” said Joshua Mahony, chief markets analyst at Scope Markets.
“However, this soft landing narrative also harbors the possibility of an extended tightening period in which the Bank of England is not under pressure to deviate from its current trajectory of higher interest rates.”
In the United States, consumer prices rose last month, but less than analysts expected, giving the Fed room to loosen monetary policy after more than a year of rate hikes.
While there is general expectation that policymakers will lag behind at next month’s meeting on borrowing cost hikes, analysts believe further rate hikes are still on the table this year.
“The (inflation) data…raises the possibility of another potential rise later in the year amid tightening jobs,” National Australia Bank’s Tapas Strickland said.
In Asian trading, Hong Kong extended its losses for the week on Friday, even as e-commerce giant Alibaba rallied with sales growth that beat forecasts.
Tokyo was closed for a holiday.
Oil prices rose as the International Energy Agency raised its forecast for global oil demand growth this year, despite weakness in the Chinese economy.
“Oil prices are up more than 20 percent since late June, buoyed by OPEC+ actions and unilateral additional cuts by Saudi Arabia and Russia, both of which have been extended through September,” Craig Erlam, senior market analyst at Oanda, said in a statement .
– Key figures at 2045 GMT –
New York – Dow: UP 0.3 percent at 35,281.40 (close)
New York – S&P 500: down 0.1 percent at 4,464.05 (close)
New York – Nasdaq: DOWN 0.6 percent at 13,644.85
London – FTSE 100: down 1.2 percent at 7,524.16 points (close)
Frankfurt – DAX: 1.0 percent down at 15,832.17 (close)
Paris – CAC 40: DOWN 1.3 percent at 7,340.19 (close)
EURO STOXX 50: down 1.4 percent at 4,321.33 (close)
Hong Kong – Hang Seng Index: down 0.9 percent at 19,075.19 (close)
Shanghai – Composite: DOWN 2.0 percent at 3,189.25 (close)
Tokyo – Nikkei 225: Closed for public holiday
Euro/Dollar: DOWN at $1.0952 from $1.0983 on Thursday
Pound/dollar: rise to $1.2699 from $1.2676
Euro/Pound: DOWN to 86.20 from 86.62 pence
Dollar/yen: up to 144.93 yen from 144.77 yen
North Sea Brent crude: up 0.5 percent to $86.81 a barrel
West Texas Intermediate: up 0.4 percent to $83.19 a barrel
day-yes/st
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