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Asian markets mixed after US retail data boosts Wall Street

US consumer data showed that Americans increased spending in April, cheering markets. ©AFP

Hong Kong (AFP) - Asian stocks were mixed Wednesday following a strong start in some markets, which took the lead from Wall Street where traders were cheered by brisk US retail sales data.

The US Federal Reserve's tightening of monetary policy to contain surging inflation has sent jolts through global markets, deepening the apprehensions of investors already roiled by China's Covid-19 lockdowns and the Russian invasion of Ukraine.

But there was some good news out of the United States, with data showing increased spending by Americans in April.Retail sales rose 0.9 percent -- partly boosted by a rebound in auto purchases.

"The economy is slowing but the consumer still looks good and that means the economy is still positioned to avoid a recession," said Edward Moya of OANDA. 

Industrial production also rose in April -- "another sign the economy isn't falling apart just yet", he added.

Wall Street closed with gains, with the tech-rich Nasdaq jumping nearly three percent.

Tokyo, Sydney and Singapore stayed up in Wednesday's trade thanks to the bounce in New York, while Hong Kong and Shanghai between red and green. 

The US consumer data added to the boost earlier this week from China, where authorities said Shanghai -- the economic engine of the world's second-largest economy -- will "gradually reopen" businesses.

Most of the city's 25 million people were placed under lockdown for weeks as authorities battled a major virus outbreak.

Millions were still confined to their homes Wednesday as confusion abounded over official statements about achieving zero Covid cases.

But just the indication of an easing was enough to cheer markets, which have been rattled by concerns about the impact of China's lockdowns on the global economy -- especially with snarled supply chains.

Communist leaders also held a rare meeting Tuesday with tech executives to express support for a sector Beijing had cracked down on before Covid started inflicting economic wounds. 

"Although investors are aware that there won't be many punitive measures for tech from now, Covid concerns will continue to depress valuations across the board," Hou Anyang, fund manager at Frontsea Asset Management, told Bloomberg.

Fed inflation plans

Central banks around the world are concerned about skyrocketing prices, and on Tuesday Federal Reserve Chair Jerome Powell said there needs to be "clear" evidence that inflation is coming down before efforts to cool the economy can be pulled back.

He acknowledged that it may be a "bumpy" ride that would inflict some pain.

His comments were in line with market expectations, said Stephen Innes of SPI Asset Management. 

"Still, the debate is evolving among the active trading community from recessionary capitulation mode to one that is short and not a particularly deep recession," he said. 

"So while this is a tacit acceptance that the Fed is in catch-up mode and is prepared to constrain demand to get inflation down, they are unlikely to do it in a jackhammer fashion."

Across the Atlantic, Britain's annual inflation rate surged to a 40-year high at 9.0 percent for April, according to a statement from the Office for National Statistics on Wednesday. 

London slid at the open, while Frankfurt and Paris wavered.

Bank of England governor Andrew Bailey warned earlier in the week of "apocalyptic" food costs fuelled by the war in Ukraine, a major wheat and cooking oil producer.

Key figures at around 0830 GMT

Hong Kong - Hang Seng Index: UP 0.2 percent at 20,644.28 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,085.98 (close)

London - FTSE 100: DOWN 0.2 percent at 7,505.88

Tokyo - Nikkei 225: UP 0.9 percent at 26,911.20 (close)

Brent North Sea crude: UP 1.5 percent at $113.57 per barrel

West Texas Intermediate: UP 1.9 percent at $114.52 per barrel

Euro/dollar: DOWN at $1.0497 from $1.0550 at 2030 GMT Tuesday

Pound/dollar: DOWN at $1.2382 from $1.2486

Euro/pound: UP at 84.77 pence from 84.47 pence 

Dollar/yen: DOWN at 129.16 yen from 129.37 yen

New York - Dow: UP 1.3 percent at 32,654.59 (close)