Global stocks mixed after China rate cuts and Japanese export gain

BEIJING (AP) — Global stocks were mixed on Thursday after China cut interest rates and President Joe Biden said “we’re not there yet” on lowering punitive tariffs on Chinese goods. .

London and Tokyo gained while Shanghai and Frankfurt fell.

Wall Street futures were higher after the benchmark S&P 500 lost 1% on Wednesday.

China’s central bank cut rates on one- and five-year loans after growth in the world’s second-largest economy slumped to 4% year on year in the last quarter following a clampdown on mounting debt on banks. real estate agents.

“The question remains whether banks will respond by increasing lending,” ING’s Iris Pang said in a report. Amid uncertainty over heavily indebted developers, Pang said, “banks will be picky about who they lend to.”

Biden said Wednesday he was uncertain when his administration might lift tariffs imposed by his predecessor, Donald Trump, on Chinese imports from 2018 in a fight over technology and trade. The two parties signed a preliminary agreement in January 2019.

“I wish I could be in a position where I could say they’re delivering on commitments,” Biden said at a press conference. “But we are not there yet.”

In early trading, London’s FTSE 100 gained 0.1% to 7,602.94 while Frankfurt’s DAX lost less than 0.1% to 15,802.96. The CAC 40 in Paris lost 0.2% to 7,157.90.

On Wall Street, futures on the S&P 500 and the Dow Jones Industrial Average rose 0.3%.

On Wednesday, the Dow Jones fell 1% on Wednesday and the tech-heavy Nasdaq composite lost 1.4%.

Apple lost 2.1% and chipmaker Nvidia fell 3.2%. The S&P 500 technology sector has fallen more than 8% this year.

The market “has succumbed to renewed inflation/Fed tightening fears,” Mizuho Bank’s Vishnu Varathan said in a report.

In Asia, the Shanghai Composite Index fell less than 0.1% to 3,555.06 and the Hang Seng in Hong Kong rose 3.4% to 24,952.35.

The Nikkei 225 in Tokyo gained 1.1% to 27,772.93 after December exports rose 17.5% from a year earlier. Auto export growth accelerated to 17.5% from 4.1% in November.

Seoul’s Kospi gained 0.7% to 2,862.68 while Sydney’s S&P ASX 200 gained 0.1% to 7,342.40.

India’s Sensex fell 1.4% to 59,235.17. New Zealand fell while Southeast Asian markets rose.

Investors have been wary since Fed officials said in mid-December that plans to cut bond purchases and other stimulus would be accelerated due to US inflation surging to its highest. high level in four decades.

As of late Tuesday, investors were pricing in a greater than 86% chance that the Fed would raise short-term rates at its March meeting, according to CME Group. That’s up from 47% a month ago.

On Wednesday, Biden called on the Fed to do more to fight inflation.

“Given the strength of our economy and the pace of recent price increases, it is important to recalibrate the support that is now needed,” Biden said.

Investors are watching the latest round of corporate earnings for signs that inflation could squeeze earnings.

In energy markets, benchmark U.S. crude fell 42 cents to $85.38 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, fell 62 cents to $87.82 a barrel in London.

The dollar rose slightly to 114.31 yen from 114.25 yen on Wednesday. The euro gained $1.1356 from $1.1351.

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