Australian shares are set to open lower as Wall Street went on a downward spiral after inflation jumped to a 40-year high and the St Louis Fed president supported rate rises.
US stocks fell in choppy trading amid a renewed rout in Treasuries following data that showed inflation accelerated to a four-decade high in January.P 500 briefly turned positive early in the morning session, before again turning lower. The tech-heavy Nasdaq 100 declined the most among major benchmarks.
“One theme that ticks all those boxes is dividend-paying European and UK equities which have lagged their US peers and offer the potential for catch-up gains on a total return basis.”The FTSE closed higher, boosted by AstraZeneca’s gains following an upbeat sales forecast, while strong metal prices lifted mining stocks to their highest in more than a decade.
Unilever, however, slipped 1.3 per cent after the consumer products maker warned its profit may suffer this year as it struggles to offset soaring costs with higher prices. It led a rise in the tech index which gained 0.6 per cent on the day. Meituan rose 1.7 per cent and JD.com Inc added 1.3 per cent. The property sector rose 1.6 per cent, with China Evergrande Group jumping 5.4 per cent.
Euro zone government debt yields jumped with German 10-year yields reaching levels unseen since 2018. Yields on benchmark German 10-year debt rose eight basis points to 0.3 per cent, a high not touched since December 2018.“The reaction in core bond markets largely looks like a contagion effect and the understanding that if the Fed outstrips the ECB too aggressively, it will only add to the euro zone inflation backdrop.
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