European shares retreated Monday after a mixed session in Asia as attention turned to Wednesday’s decision by the Federal Reserve on interest rates.
A report Friday showed that US inflation is continuing to cool, raising hopes for a smaller increase that’s less painful than last year’s aggressive hikes. The measure the Fed prefers, which doesn’t count food and energy costs, was 4.4% higher in December than a year earlier. That was down from 4.7% inflation in November.
Germany’s DAX lost 0.2% to 15,118.74 and the CAC 40 in Paris was down 0.3% at 7,076.89. Britain’s FTSE shed 0.2% to 7,752.14. The future for the S&P 500 lost 0.8% while the future for the Dow industrials declined 0.6%.
Reports that holiday travel during last week’s Lunar New Year festivities was nearly back to normal raised expectations that China’s economy may regain momentum faster than anticipated after it relaxed pandemic restrictions late last year.
In the first trading session after a weeklong break, the Shanghai Composite index gained 0.1% to 3,269.32. However, Hong Kong’s Hang Seng lost 2.7% to 22,069.73 on heavy selling of technology shares. E-commerce giant Alibaba sank 7.1% following reports it is building a facility in Singapore that some speculated could become its global headquarters.
The company denied it was planning such a change, saying the new campus in Singapore will house regional operations with partners like Lazada. Alibaba is headquartered in the east Chinese city of Hangzhou.
Taiwan’s benchmark was lifted 3.8% by gains in TSMC, the world’s biggest maker of computer chips, which jumped 8%.
Tokyo’s Nikkei 225 rose 0.2% to 27,433.40. South Korea’s Kospi lost 1.3% to 2,450.65 and the S&P/ASX 200 in Sydney shed 0.2% to 7,481.70.
India’s Sensex declined 0.4% and Bangkok’s SET edged less than 0.1% lower.
Shares in some companies in the Adani Group recovered some lost ground after recent massive losses after US short-selling firm Hindenburg Research published a report alleging major problems within India’s second-largest conglomerate, which has holdings in energy, data transmission, construction and other major industries.
Its flagship, Adani Enterprises, gained 2.3%, but shares in some other Adani listed companies fell between 5% to 20%.
The Adani Group said it was considering legal action against Hindenburg following its allegations of stock market manipulation and accounting fraud.
On Friday, the S&P 500 rose 0.2%. It has rallied through January on the growing belief inflation is declining and might relieve pressure on the economy and markets. The Dow inched 0.1% higher and the Nasdaq gained 0.9%.
So far, the jobs market has remained resilient despite a slowing overall economy, with almost all high-profile layoffs within the tech industry after it raced to expand when the pandemic sent demand for technology soaring.
Mixed earnings results have driven some big swings in markets.
Reports Friday showed that income growth for Americans slowed in December, while consumer spending fell a bit more sharply than expected.
Economists said Friday’s data likely keeps the Fed on track to raise its key benchmark rate by 0.25 percentage points on Wednesday, a step down from its increase of 0.50 points last month and four straight hikes of 0.75 points before that.
In other trading Monday, US benchmark crude lost 62 cents to $79.06 per barrel in electronic trading on the New York Mercantile Exchange. It lost $1.33 to $79.68 per barrel on Friday.
Brent crude, the international pricing benchmark, gave up 56 cents to $85.84 per barrel.
The dollar rose to 130.13 Japanese yen from 129.80 yen. The euro rose to $1.0884 from $1.0865.
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