By JOE McDONALD
AP Business Writer
BEIJING (AP) — Asian stocks were mixed and European markets opened lower Tuesday ahead of a U.S. inflation update that traders hope will encourage the Federal Reserve to ease off plans for more interest rate hikes.
London, Frankfurt and Hong Kong fell. Shanghai and Tokyo rose. Oil prices declined.
Traders worry repeated rate hikes by the Fed and other central banks to cool inflation that is at multi-decade highs might tip the world into recession. They hope Thursday’s report on U.S. consumer prices will show inflation moderating, reducing the need to slow economic activity further.
“Traders are bringing back talk of a ‘soft landing,’ which could support risk equities,” said Anderson Alves of ActivTrades in a report. If the data show lower U.S. inflation, “another dovish wave may hit markets,” helped by “easing recession fears.”
In early trading, the FTSE 100 in London lost 0.4% to 7,697.35. The DAX in Frankfurt shed 0.3% to 14,745.01 and the CAC 40 in Paris retreated 0.6% to 6,863.40.
Futures for Wall Street’s benchmark S&P 500 index and the Dow Jones Industrial Average were off 0.2%.
On Monday, the S&P dipped 0.1% and the Dow lost 0.3%. The Nasdaq composite gained 0.6%.
In Asia, the Shanghai Composite Index rose 0.4% to 3,169.50 while the Hang Seng in Hong Kong shed 0.3% to 21,331.46. The Nikkei 225 in Tokyo gained 0.8% to 26,175.56.
The Kospi in Seoul was up less than 0.1% at 2,351.31 and Sydney’s S&P-ASX 200 lost 0.3% to 7,131.00.
India’s Sensex sank 1% to 60,134.70. New Zealand gained while Southeast Asian markets retreated.
Despite trader optimism, Fed officials say rates will have to stay elevated for an extended period to extinguish upward pressure on prices. The Fed benchmark lending rate stands at a range of 4.25% to 4.50%, up from close to zero a year ago.
On Monday, Fed board members Mary Daly and Rafael Bostic dampened hopes for a rate cut this year. Daly said she expects the benchmark to be raised to over 5%. Bostic said it will be kept there “for a long time.”
Forecasters expect Thursday’s report to show inflation slowed to 6.5% in December from November’s 7.1%. That is down from June’s 9.1% peak but well above the Fed’s 2% target.
Warnings are also coming for what look to be lackluster corporate profits when reporting season begins Friday as companies contend with higher labor and other costs.
In energy markets, benchmark U.S. crude lost 26 cents to $74.37 cents per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 86 cents to $74.63 on Monday. Brent crude, the price basis for international oil trading, shed 30 cents to $79.35 per barrel in London. It gained $1.08 the previous session to $79.65.
The dollar gained to 131.88 yen from Monday’s 131.56 yen. The euro declined to $1.0735 from $1.0750.
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