TOKYO (AP) — Global shares mostly fell Tuesday as investors took a wait-and-see view on the week ahead, including stubbornly high inflation across the economy.
Data showing lagging imports in China sent Chinese benchmarks lower. Oil prices fell.
France’s CAC 40 slipped 0.4% in early trading to 7,412.85. Germany’s DAX inched down 0.1% to 15,938.15. Britain’s FTSE 100 fell 0.2% to 7,762.54. U.S. shares were set to drift lower with Dow futures dipped 0.3% to 33,599.00. S&P 500 futures were down 0.2% to 4,143.00.
Japan’s benchmark Nikkei 225 gained 1.0% to finish at 29,242.82. But other regional benchmarks fell.
Australia’s S&P/ASX 200 slipped 0.2% to 7,264.10. South Korea’s Kospi shed 0.1% to 2,510.06. Hong Kong’s Hang Seng lost 2.1% to 19,867.58, after new data on China’s trade showed declining imports. The Shanghai Composite dropped 1.1% to 3,357.67.
Chinese exports grew 8.5% in April, showing more unexpected strength despite weakening global demand, according to customs data. Exports grew to $295.4 billion compared with a year earlier, although at a slower pace, building on momentum seen in the March data when exports rose 14.8%.
But imports shrank at a faster pace, with the total slumping 7.9% to $205.2 billion compared to the same time last year, according to data Tuesday from the General Administration of Customs. It was down 1.4% in March. Trade with the U.S. and European Union showed a contraction in comparison with last year. China’s trade surplus in April widened, growing 82.3% compared to the same period last year.
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“Asian equities traded sideways on Tuesday after U.S. stocks traded within a tight range, remaining mostly unchanged in volatile trading, as investors reacted to the mixed response to the Fed’s senior loan officer survey,” said Anderson Alves, analyst at ActivTrades. “The survey showed a tightening of credit availability, impacting companies’ margins and signaling an imminent economic slowdown.”
The larger concern for markets is that all the turmoil could cause U.S. banks to pull back on their lending. That in turn could raise the risk of a recession that many investors already see as highly likely.
A report Monday from the Federal Reserve showed many banks tightened their lending standards during the first three months of the year. Not only that, the survey suggested banks widely expect to raise their standards over the course of 2023. Among the reasons some smaller and mid-sized banks gave for the forecast were wanting to take less risk and worries about deposit outflows.
The Federal Reserve has lifted its benchmark interest rate to a range of 5%-5.25%, up from virtually zero early last year, in hopes of slowing high inflation. High rates do that by slowing the economy and hurting prices for investments, which runs the risk of causing a recession if they stay too high for too long.
The Fed said it’s not sure of its next move, as swaths of the economy have shown sharp slowdowns but the job market remains largely resilient.
Later this week, the U.S. government will give the latest monthly updates on inflation at the consumer and wholesale levels. Earnings reports will also arrive from Duke Energy, The Walt Disney Co. and News Corp., as well as Toyota Motor Corp. in Japan.
In energy trading, benchmark U.S. crude fell 97 cents to $72.19 a barrel. Brent crude, the international standard, lost 96 cents to $76.05 a barrel.
In currency trading, the U.S. dollar inched down to 134.86 Japanese yen from 135.04 yen. The euro cost $1.0981, down from $1.1008.
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