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Global market update: Rising US inflation triggers market wobble

Published 11/04/2024, 10:51 am
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Investing.com - Asia-Pacific (APAC) shares opened in the red on Thursday after key US Consumer Price Index for March came in slightly above analysts' expectations.

By 11:00 am AEST (1:00 am GMT) the S&P/ASX 200, KOSPI 200 and Nikkei 225 fell 0.7%, 1.2% and 0.8% respectively.

The hotter-than-anticipated US inflation data sent the US equities market into a tailspin, with the Dow Jones Industrial Average dropping 1.09% to 38,461.51, the S&P 500 losing 0.95% to 5,160.64, and the tech-heavy Nasdaq Composite falling 0.84% to 16,170.36. Real estate stocks, typically sensitive to interest rate changes, bore the brunt of the impact with a 4.1% decline.

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US Treasury yields also experienced a significant surge, with the 2-year yield increasing by 23 basis points to 4.97%, and the 10-year yield rising by 18 basis points to 4.545%. This rise in yields suggests that market expectations for a June rate cut have been significantly diminished.

In Asia, Chinese shares closed lower, with the benchmark Shanghai Composite Index down 0.7% at 3,027.34. On the other hand, Hong Kong's Hang Seng Index managed to rise 1.85% to close at 17,139.17. Japanese stocks also ended lower, while Indian shares managed to close higher.

European shares displayed a mixed reaction to the US inflation news. Although initially falling, they managed a recovery as investors shifted their focus to the upcoming European Central Bank's monetary policy decision. The pan-European Stoxx Europe 600 was up 0.15% to 506.59, while the UK's FTSE 100 index rose 0.33% to 7,961.21.

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In the commodities market, Brent crude oil was up 1.2% to US$90.48 a barrel, while gold was down 0.8% at US$2,334.04. Global oil prices rose following geopolitical tensions in the Gaza Strip, which may complicate ceasefire talks.

As the dust settles from the US inflation shock, the focus now shifts to upcoming key data releases. This includes the CommBank Household Spending Insights (HSI) index for March in Australia, China's inflation data, and the European Central Bank's interest rate decision. In the US, weekly jobless claims and producer price data are scheduled for release.

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