Stock market today: World shares track Wall Street rally as Britain reports inflation fell in June
BANGKOK (AP) — Shares opened higher in Europe on Wednesday, taking their cues from gains in Asia and on Wall Street. U.S. futures were little changed and oil prices fell.
Britain reported inflation fell to 7.9% in June, a 15-month low. Economists had forecast inflation would decline to 8.2%, but it did better than that thanks to falling fuel prices and milder food price increases.
It’s a relief for struggling consumers and is a further welcome sign that upward price pressures are abating. That has raised hopes among investors that central banks might begin winding down the latest cycle of interest rate hikes.
Britain’s FTSE 100 advanced 1.3% to 7,552.03 and Germany’s DAX was up 0.2%, at 16,165.07. In Paris, the CAC40 gained 0.6% to 7,360.78.
The future for the S&P 500 edged less than 0.1% higher and that for the Dow Jones Industrial Average gained 0.1%.
In Asian trading, Hong Kong’s Hang Seng index fell 0.3% to 18,952.31, partly due to selling of property shares after troubled developer China Evergrande reported its total debts rose in the past two years to about $340 billion.
New World Development fell 1.9% and Sun Hung Kai Properties lost 0.7%.
The Shanghai Composite index closed flat at 3,198.84.
The property market, a major driver of growth in China, has languished after regulators reined in lending to try to bring debt in the industry under control
In Tokyo, the Nikkei 225 gained 1.2% to 32,896.03 while the Kospi in Seoul was barely changed at 2,608.24. Australia’s S&P/ASX 200 climbed 0.6% to 7,323.70.
Shares rose in India and Bangkok.
The Asian Development Bank issued an update on regional economies noting that exports have weakened as growth has slowed in China and other major economies. Demand for key technology exports fell sharply, the report by the regional development lender said.
On Tuesday, the S&P 500 rose 0.7%, posting its highest finish since early April 2022. The Dow industrials rallied 1.1% and the Nasdaq composite climbed 0.8%.
Microsoft was the biggest single force pushing up the S&P 500, by far. Wall Street has sent a select group of stocks soaring this year on hopes that AI will drive tremendous growth in profits and herald a revolution for the global economy. Besides Microsoft’s nearly 50% gain for the year, Nvidia has more than tripled.
Stocks in the financial industry also drove the market higher. Charles Schwab jumped 12.6% after reporting stronger profit and revenue for the spring than analysts expected. It was one of several big financial companies to report better results than forecast, including Bank of America and Morgan Stanley.
Wall Street’s reporting season is just ramping up as companies tell investors how much profit they earned from April through June. The biggest question is whether the economy can avoid a long-predicted recession after the Federal Reserve cranked up interest rates to fight inflation.
Reports on the economy Tuesday came in mixed. One said that sales at U.S. retailers grew by less last month than economists expected, marking a slowdown from May’s growth.
So far, strong consumer spending has been one of the main bulwarks keeping the economy out of a recession. Economists said underlying sales trends, which exclude automobiles, gasoline and other items, were stronger than expected in June.
If the Fed does follow through on expectations and raises the federal funds rate next week to a range of 5.25% to 5.50%, it would be at its highest level since 2001. That would be up from its record low of nearly zero early last year.
But inflation has been slowing over the last year, and hopes are high on Wall Street that it will continue cooling enough to get the Fed to stop raising rates and perhaps begin cutting them next year.
In other trading Wednesday, U.S. benchmark crude rebounded from early losses, gaining 22 cents to $75.88 a barrel in electronic trading on the New York Mercantile Exchange. It climbed $1.58 to $75.66 a barrel on Tuesday.
Brent crude, the pricing basis for international trading, picked up 39 cents to $80.02 a barrel.
The U.S. dollar climbed to 139.68 Japanese yen from 138.83 yen. The euro fell to $1.1225 from $1.1230.