Falling Shares Worldwide: Focus on Inflation, Earnings, and Growth

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Global shares witnessed a dip on Friday as the market participants closely watched the earnings reports, indicators, and projections regarding inflation in the United States and other countries. Wall Street suffered a second consecutive day of losses, affecting global shares as well.

In Europe, France’s CAC 40 declined by 0.3% to 7,169.30, while Germany’s DAX lost 0.4% to 15,455.07. The FTSE 100 of Britain fell by 0.2% to 7,893.92. The future for the Dow Jones Industrial Average saw a minor increase of less than 0.1% to 33,760.00, and the S&P 500 future gained 0.1% to 33,769.00.

In China, the consumer inflation rate showed a minor hike last month, driven by the lifting of pandemic restrictions, increased travel and spending during the Lunar New Year. On the other hand, producer prices fell by 0.8% in January after a 0.7% decrease in the previous month. The consumer price inflation rose to 2.1% from a 1.8% increase in December. However, there is a lack of consensus among market analysts regarding the magnitude of China’s economic recovery this year.

Japan’s Nikkei 225 saw a rise of 0.3% to close at 27,670.98, while Australia’s S&P/ASX 200 fell by 0.8% to 7,433.70. South Korea’s Kospi declined by 0.5% to 2,469.73. Hong Kong’s Hang Seng witnessed a drop of 2.0% to 21,190.42, and the Shanghai Composite was down by 0.3% at 3,260.67. Shares in Mumbai and Taiwan also showed a decline.

In the upcoming week, the United States and Britain will release updates on inflation, along with U.S. retail sales and industrial production data. Japan will also announce its economic growth figures for the fourth quarter of 2022.

Global shares have been fluctuating due to uncertainty regarding the interest rates and inflation. High rates may curb inflation but also increase the risk of a recession and negatively impact investment prices.

In the energy sector, benchmark U.S. crude saw an increase of $1.88 to $79.94 a barrel in electronic trading on the New York Mercantile Exchange, while Brent crude, the international standard, rose by $2.09 to $86.59 a barrel. The U.S. dollar weakened against the Japanese yen, from 131.44 yen to 130.40 yen, and the euro cost $1.0742, up from $1.0739.

According to Francesco Pesole, a strategist at ING, the focus will now shift back to data, after the markets absorbed the latest rate announcements and data releases.

 

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