Global stocks follow Wall Street higher after US inflation rises

Global stock markets and Wall Street futures rose Wednesday after traders shrugged off higher US inflation and a decline in Japanese machinery orders.

London and Paris opened higher while Shanghai, Hong Kong and Seoul rose. Tokyo was off less than 0.5%.

On Tuesday, Wall Street's benchmark S&P 500 index climbed 0.3% to a new high, propelled by tech and consumer stocks on optimism the vaccine rollout will allow business activity to return to normal. Johnson & Johnson fell 1.3% after US regulators suspended use of its single-dose vaccine to investigate possibly dangerous blood clots.

The US government reported consumer prices increased by a stronger-than-expected 0.6% in March, the fastest rate since 2012. Higher inflation normally fuels fears interest rates might be raised to keep prices stable, but the Federal Reserve has said the economy will be allowed to run hot to ensure a recovery is in place.

 

Traders took the well-telegraphed inflation pick-up' in stride, Stephen Innes of Axi said in a report. Markets also are seemingly unfazed by the J&J suspension.

In early trading, London's FTSE 100 was up less than 0.1% at 6,896.64. Frankfurt's DAX declined less than 0.1% to 15,222.10 while the CAC 40 in Paris gained 0.2% to 6,196.15.

On Wall Street, the future for the S&P 500 index was up less than 0.1% while that for the Dow Jones Industrial Average was unchanged.

The Dow, which includes J&J, fell 0.2% on Tuesday. The Nasdaq, with more technology stocks, gained 1.1%.

In Asia, the Shanghai Composite Index advanced 0.6% to 3,416.72 and the Hang Seng in Hong Kong added 1.3% to 28,855.83.

The Nikkei 225 in Tokyo shed 0.4% to 29,620.99 after government data showed February machinery orders fell by an unexpectedly wide margin of 8.5% from the previous month, adding to concern about the country's recovery.

The Kospi in Seoul was up 0.4% at3,182.38 and Sydney's S&P-ASX 200 gained 0.7% to 7,023.10.

Indian markets were closed for a holiday. New Zealand and Jakarta advanced.

Singapore declined after the government reported unexpectedly strong first-quarter economic growth of 0.2% over a year ago. The central bank left monetary policy unchanged.

Investors have been encouraged by the rollout of coronavirus vaccines despite renewed disease outbreaks that have prompted some governments to tighten or reimpose business and trade curbs.

But worries about the potential loss of a vaccine option pulled lower companies that are counting on pandemic restrictions easing. American Airlines slipped 1.5% and Delta Air Lines fell 1.1%.

The yield on the 10-year US Treasury fell to to 1.62% from Monday's 1.67%.

In energy markets, benchmark US crude rose 76 cents to $60.94 per barrel in electronic trading on the New York Mercantile Exchange. The contract advanced 48 cents on Tuesday to close at $60.18. Brent crude, the international price standard, gained 79 cents to $64.46 per barrel in London. It added 39 cents the pervious session to $63.67 a barrel.

The dollar declined to 109.00 yen from Tuesday's 109.09 yen. The euro rose to $1.1965 from the previous session's $1.1946.