Global stocks fall amid concerns over inflation and oil prices

title=soil prices hovered above $120 a barrel, adding to price pressures. (AP Photo/Kin Cheung)” title=”A woman wearing a face mask stands in front of a bank’s electronic board showing the Hong Kong stock index in Hong Kong, Thursday, June 9, 2022. Stocks were mostly weaker in Asia on Thursday as investors were watching for further signs of inflation and crude oil prices hovered above $120 a barrel, adding to price pressures. (AP Photo/Kin Cheung)” loading=”lazy”/>

A woman wearing a face mask stands in front of a bank’s electronic board showing the Hong Kong stock index in Hong Kong, Thursday, June 9, 2022. Stocks were mostly weaker in Asia on Thursday as investors were watching for further signs of inflation and crude oil prices hovered above $120 a barrel, adding to price pressures. (AP Photo/Kin Cheung)

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Global stocks were mostly down on Thursday as investors watched for further signs of inflation, including soaring crude oil prices.

European stocks fell in early trading. France’s CAC 40 slipped 0.7% in early trading to 6,404.59, while Germany’s DAX fell 0.9% to 14,309.79. Britain’s FTSE 100 fell 0.7% to 7,543.28.

Dow Industrials futures edged down nearly 0.1% to 32,862.00. The S&P 500 future fell nearly 0.1% to 4,111.50.

Benchmarks fell across Asia except in Tokyo, where a weaker yen pushed up issuance from some Japanese exporters. Nintendo Co.’s issuance jumped 1.6%, while Honda Motor Co. shares gained more than 0.6%.

The Japanese yen recently fell to fresh 20-year lows against the US dollar, a trend the International Monetary Fund and other analysts expect to continue for some time due to higher interest rates in the states. United States and Europe, compared to Japan, where long-term interest rates remain close to zero.

The dollar was trading at 133.55 Japanese yen after hitting 134 yen earlier in the day, from 134.20 yen on Wednesday night. The euro traded at $1.0700, down from $1.0718.

The Governing Council of the European Central Bank will hold a monetary policy meeting later today. Comments from Christine Lagarde, head of the European Central Bank, have markets pricing in an interest rate hike in July, with perhaps more to follow.

“Nevertheless, the economic recovery remains fragile and subject to downside risks related to geopolitical risks, erosion of real incomes, supply chain constraints and limited fiscal support,” said Venkateswaran Lavanya of the Department of Asia and Oceania Treasury of Mizuho Bank in Singapore.

“For this, ECB will not want to throw the baby out with the bathwater; calibrate monetary tightening at a more sustained pace, even if it is slow,” she said in a comment.

Japan’s benchmark Nikkei 225 rose less than 0.1% to end at 28,246.53. Australia’s S&P/ASX 200 slipped 1.4% to 7,019.70. The South Korean Kospi was little changed, falling less than 0.1% to 2,625.44. Hong Kong’s Hang Seng fell 0.7% to 21,869.05, while the Shanghai Composite lost 0.8% to 3,238.95.

The impact of inflation has worsened since Russia’s invasion of Ukraine, which put increased pressure on energy and food prices.

In energy trading, benchmark U.S. crude slipped 42 cents to $121.69 a barrel. He earned $2.70 on Wednesday. Brent, the international standard for oil pricing, fell 30 cents to $123.28 a barrel.

China reported that its exports jumped 17% year on year earlier in May to $308.3 billion, up from April’s 3.7% growth as coronavirus precautions took a hit. eased in Shanghai and other cities. Imports rose 4% to $229.5 billion, accelerating from the previous month’s 0.7% growth.

China’s trade has been slowed by weak export demand and restrictions imposed to fight epidemics in Shanghai and other cities. Consumer demand for imports has been crushed by rules that have confined millions of families to their homes, sometimes for weeks. But most factories, stores and other businesses in Shanghai, Beijing and other cities have been allowed to reopen.

The Federal Reserve is widely expected to raise its key short-term interest rate by half a percentage point at its meeting next week. It would be the second consecutive increase of double the usual amount by the US central bank, and investors expect a third in July.

The big worries on Wall Street remain rising inflation and whether the Fed’s move to aggressively raising interest rates will help soften the impact or possibly push the economy into a recession.

The Fed’s goal is to slow economic growth enough to cushion the impact of inflation. Demand for goods exceeded supply and production capacity for most of the post-pandemic recovery. But investors fear the Fed is going too far too fast in raising rates, pushing the US economy into a recession.

The next big inflation update comes on Friday, when the US government releases its latest reading on the consumer price index.

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AP Business Writer Joe McDonald contributed.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama



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Felix J. Dixon