Global shares rise in muted trading, oil prices fall

TOKYO (AP) – Global stocks were mostly higher on Friday after Wall Street benchmarks fell on concerns that the Federal…

TOKYO (AP) — Global stocks were mostly higher on Friday after Wall Street benchmarks fell on concerns that the U.S. Federal Reserve will continue to raise interest rates.

European stocks were mixed in early trade as official data showed consumer prices in the European Union, where the euro is used, fell, but still rose 9.2% in December. The European Union’s statistics agency Eurostat said it was the slowest increase since August.

France’s CAC 40 rose nearly 0.1% to 6,766.79 in early trade, while Britain’s FTSE 100 rose 0.2% to 7,647.10.

Germany’s DAX lost 0.2% to 14,401.92 after official data factory orders fell 5.3% in November compared to the previous month due to a sharp drop in foreign demand. New orders, a key gauge for Europe’s biggest economy, fell for the third time in four months after rising 0.6% in October.

A tepid reading in the US labor market on Thursday led traders to believe that the Fed will need to continue to inflict pain on the economy to combat rising prices. Inflation has eased from a peak of 9.1% in June to 7.1% in November, and investors are hoping for signs that the Fed could ease the brakes on the economy with high interest rates. These hopes have not yet come true.

Strong labor market reports set the stage for Friday’s release of the Labor Department’s December hiring picture.

“Overall risk sentiment may lean more to the wait ahead of the US jobs report as Wall Street has not given clear confidence in the direction of the market over the past few days,” Yap Jun Rong, market analyst at IG, said in a report.

In Asian trading, Japan’s benchmark Nikkei 225 rose 0.6% to 25,973.85. Australia’s S&P/ASX 200 added 0.7% to 7,109.60. South Korea’s Kospi rose 1.1% to 2,289.97. Hong Kong’s Hang Seng index pared earlier gains, falling 0.3% to 20,991.64. The Shanghai Composite rose nearly 0.1% to 3,157.64.

Analysts expect economic growth in Asia to slow this year, although China’s easing of COVID-19 restrictions is expected to be a plus. Suktae Oh, an analyst at Societe Generale, expects the Bank of Korea to raise rates by 25 percentage points to 3.50% on its policy next week.

“Data continues to point to weak economic activity and peak inflation. “Financial stability concerns persist due to high corporate leverage and weakness in the housing market, which would be bearish on growth prospects,” he said.

ADP reported a bigger-than-expected increase in U.S. private company jobs last month. The US government has reported the number of Americans applying unemployment benefit fell to its lowest level in more than three months last week.

On Wednesday, a government report showed a higher-than-expected number vacancies in November.

A robust labor market is putting upward pressure on wages and confirming the central bank’s view determination to keep interest rates high to slow economic growth and curb inflation. The strategy, however, risks going too far, triggering a recession.

The Fed’s benchmark lending rate is in a range of 4.25% to 4.5%, down from near zero after seven hikes last year. He predicted that the rate would reach a range of 5% to 5.25% by the end of 2023, and he did not call for a rate cut before 2024.

Wall Street is also waiting for the latest round corporate income to better understand how companies are coping with hot inflation and softening consumer demand. Companies in the S&P 500 will pick up the pace of reporting in a few weeks, but some results are already emerging.

Benchmark U.S. crude added 64 cents to $74.31 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international benchmark, rose 62 cents to $79.31 a barrel.

In currency trading, the US dollar rose to 134.30 Japanese yen from 133.40 yen. The euro was worth $1.0510 against $1.0524.


Yuri Kageyama is on Twitter

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