ustralian Shares Close at 3-Week Lows
The ASX 200 fell 31.50 points or 0.49% to 6418.20 Thursday, falling for the 3rd consecutive session and closing at a 3-week low amid prospects of higher inflation as global economies recover from the Covid-19 pandemic. White House said Wednesday that the US government is prepared for ‘months or quarters’ of higher prices, while the latest data showed US inflation jumping the most in 13 years in April. Local 10-year rates were near 3-week highs of 1.77%, while US 10-year rates were at 1.683%. Among stocks, Afterpay lost 5.4% and Xero dropped 13%, while Perenti Global sank 28.21% on a downbeat operational update. In local news, Canberra secured 25 million doses of Moderna COVID-19 jabs from the US, with the surprise deal also paving the way for local production of mRNA vaccines.
Japanese Shares Plunge 2.5%
The Nikkei 225 tumbled 699.5 points or 2.49% to a near 4-month low of 27,448.01 on Thursday after a shocking rise in US inflation sent the Dow Jones to one of its worst daily performances of 2021. The US annual inflation rate jumped to 4.2%, the highest in 13 years and well above forecasts of 3.6%, while the monthly gauge rose 0.8%, the most since 2009, and the monthly core inflation increased to 0.9%, the highest since 1996. Local 10-year bond yields were at 0.089% while US 10-year rates were at monthly highs of 1.678%. In local news, Bank of Japan’s governor Haruhiko Kuroda warned of economic risks from a spike in COVID-19 cases and new curbs in Japan. On the data side, Japan’s current account surplus widened to JPY 2,650 billion in March from JPY 1,929 billion in the same month of 2020. Losers were nearly broad-based, led by the technology sector, healthcare, and industrials.
New Zealand Shares Close at 3-Week Lows
The NZX 50 lost 137.79 points or 1.1% to 12428.12 on Thursday, extending declines for the 7th consecutive session and falling to fresh 3-week lows as fears of rising inflation spooked market participants. Local 10-year rates touched 2-month highs of 1.886%, while US 10-year rates hit monthly highs of 1.683%. In the US, the annual inflation rate soared to 4.2% in April, the highest reading since September of 2008, amid a surge in demand as the economy reopens. Meantime, the number of US job openings rose by 597 thousand from the previous month to 8.123 million in March, the highest level since the series began in December 2000. Among stocks, A2 Milk slumped a further 3.87%, extending 3 year lows after the company issued another profit downgrade earlier this week, its fourth since it posted a record profit last August. In local data, food prices increased to 0.7% year-on-year in April of 2021 from 0.3% in the previous month.
Romanian Inflation Rate at 15-Month High of 3.2%
Romania’s annual inflation rate inched up to 3.24 percent in April of 2021 from 3.05 percent a month earlier and slightly above market estimates of 3.2 percent. It was the highest inflation rate since January 2020, due to a faster rise in prices of both services (2.6 percent vs 2.2 percent in March) and non-food products (5.2 percent vs 4.4 percent). Meanwhile, food prices continued to increase (0.8 percent vs 1.6 percent). On a monthly basis, consumer prices rose 0.5 percent in April, accelerating from a 0.4 percent in a month earlier.