Global stocks plunge as traders await US inflation numbers

BEIJING (AP) – Global stocks and Wall Street futures sank on Tuesday as investors awaited US inflation data amid worries about higher interest rates, Chinese efforts to contain the coronavirus outbreak and Russia’s war on Ukraine.

London, Frankfurt, Tokyo and Seoul fell. Shanghai and Hong Kong advanced. Oil prices rose by more than $3 a barrel.

Investors were waiting for a fresh round of US consumer price data and corporate results to see how profits are affected by inflation hitting a four-decade high.

Markets are uneasy about plans by the Federal Reserve and other central banks to try to quell inflation by lowering ultra-low interest rates. Among his concerns are Russia’s attack on Ukraine and China’s decision to close most businesses in Shanghai, its commercial capital, to fight the coronavirus outbreak.

“Today all eyes are on the US March CPI reading,” ING analysts said in a report, which is expected to rise to 8.4% from a year ago.

“The numbers around that should keep up with aggressive Fed strict expectations,” he said.

In early trade, the FTSE 100 in London was down 0.4% at 7,587.41 and Frankfurt’s DAX fell 1% to 14,043.89. The CAC 40 in Paris retreated 0.8% to 6,502.12.

On Wall Street, the benchmark S&P 500 index and the Dow Jones Industrial Average were futures lower 0.1%.

The S&P was down 1.7% and the Dow 1.2% on Monday. The Nasdaq dropped 2.2%.

In Asia, the Shanghai Composite Index rose 1.5% to 3,213.33, after officials announced they would ease anti-coronavirus controls that closed most businesses in China’s most populous city and disrupted manufacturing.

The Hang Seng in Hong Kong climbed 0.5% to 21,319.13, while the Nikkei 225 in Tokyo was down 1.8% at 26,334.98.

The Kospi in Seoul lost 1% to 2,666.76 and Sydney’s S&P-ASX 200 retreated 0.4% to 7,454.00.

India’s Sensex fell 0.5% to 58,685.08. Jakarta advanced while New Zealand and other Southeast Asian markets declined.

Later on Tuesday, the Labor Department was due to report March consumer prices.

Investors worry that inflation may be strong enough to encourage consumers to cut spending, which will mean a sharper-than-expected slowdown in economic growth.

Investors are expecting more aggressive changes from the Fed as it tries to rein in rising inflation. The central bank has already announced a quarter percent increase in its prime interest rate.

Fed officials indicated in the minutes of last month’s meeting that they were considering raising the US benchmark rate by twice the normal amount in upcoming meetings. He also indicated that he would reduce the Fed’s bond holdings, which would increase long-term lending rates.

Oil prices have fallen back on hopes of weak Chinese demand after most businesses in Shanghai were closed and controls imposed on other industrial centers to contain the coronavirus outbreak. Concerns about a possible disruption in Russian supplies pushed prices above $130 a barrel last month.

Automakers and other manufacturers in China are reducing production after authorities imposed tough restrictions to help stem coronavirus outbreaks in Shanghai and other cities.

Benchmark US crude rose $3.02 to $97.31 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $3.97 to $94.29 on Monday. Brent crude, the price base for international oil trade, rose $3.26 to $101.74 a barrel in London. It fell $4.30 to $98.48 in the previous session.

The dollar rose to 125.63 Japanese yen from Monday’s 125.46 yen. The euro declined from $1.0890 to $1.0870.

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