Global shares are generally higher as China seeks to stimulate the economy

Global stocks were mostly higher on Thursday after China signaled its central bank would ease reserve requirements for lenders to counter the hit to its economy from pandemic shutdowns in major cities like Shanghai.

London stocks fell while Paris, Tokyo and Shanghai gained. Frankfurt was flat. US futures fell slightly and oil prices also fell.

Trading was relatively calm, with some Asian markets closed for the holidays. Markets in the United States and Europe face a shortened week and will be closed on Friday for the Good Friday holiday.

Chinese state media reported that Premier Li Keqiang stressed the need to step up financial support for the economy at a State Council meeting on Wednesday.

Officials at the meeting agreed “to use monetary policy tools such as reserve requirement ratio cuts at the appropriate time”, the official Xinhua news agency reported.

“The outlook remains very uncertain, but there are signs that the virus situation is starting to improve and that officials’ attention is shifting towards helping the economy get back on its feet,” Julian said. Evans-Pritchard of Capital Economics in a note.

the German DAX,
+0.48%
fell slightly by 0.1% Thursday morning to 14,068.52 while the CAC 40 PX1,
+0.79%
in Paris edged up 0.1% to 6,546.02. the British FTSE 100 UKX,
+0.39%
slipped 0.1% to 7,569.81. Futures contracts Dow Jones Industrials YM00,
+0.31%
was almost unchanged, while for the S&P 500 ES00,
-0.52%
was 0.1% higher.

Investors appeared to discount fresh evidence that inflation remains widespread in the US economy as a US government report said rising energy costs pushed wholesale prices to a record 11.2% last month compared to the previous year.

This report followed news a day earlier that consumer prices in the United States remained at their highest level in about 40 years.

Rising prices are prompting the Federal Reserve and many other central banks to tighten monetary policy by raising interest rates, among other measures, to help calm the growing demand that is contributing to the problem.

South Korea’s central bank on Thursday raised its key rate by 25 percentage points to 1.50%, its fourth hike since August 2021. Kospi 180721,
+0.01%
in Seoul was flat at 2,716.71.

Stocks in Singapore also held steady after the Monetary Authority of Singapore tightened policy by adjusting exchange rates more aggressively than expected.

New Zealand’s central bank raised its benchmark interest rate on Wednesday and Australia’s is expected to do so in June, analysts said.

Hang Seng HSI from Hong Kong,
+0.67%
rose 0.7% to 21,518.08 and the Shanghai Composite SHCOMP Index,
+1.22%
rose 1.2% to 3,225.64.

On Wednesday, the S&P 500 SPX index,
-0.40%
increased by 1.1%. The Dow Jones Industrial Average DJIA,
+0.39%
rose 1% and the Nasdaq COMP,
-0.98%
picked up 2%. The Russell 2000 RUT,
-0.07%
the index jumped 1.9%.

US inflation may be at its peak, but it will likely persist for some time as cost pressures work their way through markets.

Russia’s invasion of Ukraine increased volatility in energy prices, as oil supplies were already tight as demand increased with the decline of the pandemic. Crude oil prices in the United States are up about 40% for the year, pushing up gasoline prices and giving inflation a bigger impact on people’s wallets.

“On the geopolitical front, the Ukraine crisis continues to weigh on sentiment, with markets watching for any signs of further deterioration,” ActivTrades’ Anderson Alves said in a commentary.

Companies in various sectors have increased their prices to offset rising costs and maintain or increase their margins.

Investors will get more details on how businesses and consumers are handling inflation as more companies release their latest financial results. UnitedHealth Group UNH insurer,
+1.74%
and Wells Fargo WFC Banks,
-4.18%
and Citigroup C,
+2.07%
are due to report their earnings on Thursday.

Also on Thursday, the US Department of Commerce will release its retail sales report for March, which will show if and where consumers are cutting back on spending.

In energy trading, the US benchmark crude oil CL00,
-0.82%
slipped 58 cents to $103.67 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $3.65 to $104.25 a barrel on Wednesday. Crude Brent BRN00,
-0.62%,
the international oil pricing standard, fell 59 cents to $108.19 a barrel.

The US dollar slipped to 125.35 Japanese yen USDJPY,
+0.07%
from 125.63 yen. EURUSD euro,
-0.88%
fell from $1.0888 to $1.0917.

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