A roundup of trading on major world markets:
NEW YORK – Wall Street has sold off as chances of an interest rate hike later this year rose after data pointed to firming inflation.
US consumer prices on Tuesday recorded their biggest increase in more than three years in April as petrol and rents rose.
The data pointed to a steady inflation build-up that could give the Federal Reserve ammunition to raise interest rates later this year.
Also, a Fed policymaker said he will push for an interest rate hike in June or July, and two others still see up to three rate increases in 2016, leaving the door open to a change in monetary policy relatively soon.
Traders now see the probability of a rate hike after the Fed’s November meeting at 58 per cent, up from roughly 42 per cent on Monday, according to the CME FedWatch tool.
“The equity market is taking cues from stronger data and some of the comments from Fed members in terms of maybe hiking more than is priced into the market,” said Patrick Maldari, senior fixed income investment specialist at Aberdeen Asset Management in New York.
The Dow Jones industrial average fell 180.73 points, or 1.02 per cent, to 17,529.98, the S&P 500 lost 19.45 points, or 0.94 per cent, to 2047.21 and the Nasdaq Composite dropped 59.73 points, or 1.25 per cent, to 4715.73.
LONDON – European shares steadied with gains in companies such as Taylor Wimpey and Vodafone following encouraging updates and a rally in mining companies offset by a weaker auto sector.
The pan-European FTSEurofirst 300 ended little changed after earlier rising to its highest since early May.
Taylor Wimpey advanced 4.7 per cent after the housebuilder announced a new special payout, promising investors about STG1.3 billion pounds ($A2.57 billion) over three years, underpinned by strong demand for property in Britain.
Vodafone rose 1.5 per cent after the world’s second-largest mobile phone operator said its earnings growth would accelerate this year. The group said a program to improve its networks had boosted demand in Europe and helped it to return to underlying growth in 2016 revenue and core earnings for the first time since 2008.
“Demand for data continues to grow strongly…and Vodafone have invested heavily in infrastructure to capitalise on this,” Steve Clayton, head of equity research at Hargreaves Lansdown, said.
The STOXX Europe 600 Auto index fell 2.7 per cent, making it the top sectoral loser.
The FTSE 100 rose 16.37 points, or 0.27 per cent, to 6,167.77 while Germany’s DAX fell 62.71 points, or 0.63 per cent, at 9,890.19.
HONG KONG – Asian shares recovered from two-month lows after a rebound in technology giant Apple Inc and oil price gains boosted Wall Street.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8 per cent, extending its recovery from a two-month low set on Friday.
Japan’s Nikkei gained about 1.1 per cent.
The Hang Seng index closed up 1.2 per cent at 20,118.80, while the Hong Kong China Enterprises Index closed up 1.4 per cent at 8,425.78.
However the blue-chip CSI300 index fell 0.3 per cent to 3,086.02, and the Shanghai Composite Index was likewise down 0.3 per cent to 2,843.68 on fears more monetary stimulus may not be coming.
“The market’s risk appetite seems to be coming back, or rather, its excessive pessimism is easing,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
Concerns about a slowdown in the Chinese economy could weigh on Asian shares, however, after data published on Saturday showed investment, factory output and retail sales all grew more slowly than expected in April.
WELLINGTON – The NZX 50 rose 60.74 points, or 0.9 per cent, 6974.8.
