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Asian shares mixed as investors eye inflation, US data

Nikkei

Nikkei 225 lost 0.5% to 28,504.98, S&P/ASX 200 gained 0.3% to 7,109.90, Hang Seng dropped 0.2% to 29,106.10, the Shanghai Composite index edged up 0.3% to 3,604.33

Asian shares were mixed Thursday, as investors watched for signs of inflation and awaited U.S. economic data expected later in the day.

Japan’s benchmark Nikkei 225 lost 0.5% to 28,504.98. South Korea’s Kospi was virtually unchanged at 3,168.74. Australia’s S&P/ASX 200 gained 0.3% to 7,109.90. Hong Kong’s Hang Seng dropped 0.2% to 29,106.10. The Shanghai Composite index edged up 0.3% to 3,604.33.

The Japanese government is expected to extend its “state of emergency” in some areas including Tokyo past May 31 in an effort to curb COVID-19 cases. Public concern has grown with the Olympics due to begin in Tokyo on July 23. Surveys show a majority of residents want the games cancelled or postponed.

There are push-backs all round right now, and they are going to buffet markets, largely because they aren’t all pushing in the same direction, RaboResearch said in a report.

Technology shares were under pressure, though Chinese mobile phone maker Xiaomi added 2.5% after it confirmed that the U.S. had removed it from a blacklist for Chinese tech companies.

On Wall Street, the S&P 500 closed just under 0.2% higher after wavering between small gains and losses. Retailers and other companies that rely on consumer spending made solid gains. Communication and financial stocks also helped lift the market. The gains were tempered by declines in health care, technology and other stocks.

The S&P 500 added 7.86 points to 4,195.99. The Dow Jones Industrial Average added less than 0.1% to 34,323.05. The Nasdaq advanced 0.6% to 13,738. The Russell 2000 index of smaller companies rose 2% to 2,249.27.

The next key economic update is set for Thursday, when the Commerce Department releases its latest GDP report for the first quarter. Economists are expecting a huge rebound in 2021 and results from the beginning of the year will give Wall Street a clearer picture moving forward.

The growing economy has also raised inflation worries, though analysts expect that much of the rise will be tied to economic growth and will be digestible. Concern centres around stronger inflation prompting governments and central banks to roll back economic stimulus and change course on interest rates. Federal Reserve officials have said that they see no need yet to change course.

Markets have been bumpy over the last few days as investors move past a stellar corporate earnings season and await additional clues on economic growth and inflation, which has been rising.

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