Global equities rebound on inflation concerns

Asia-Pacific equities rallied as global markets rebounded from a bout of volatility caused by inflation fears.

Japan’s Topix rose 1.8% on Friday, while Hong Kong’s Hang Seng rose 1%. China’s CSI 300 index of stocks listed in Shanghai and Shenzhen rose 1.7 percent and Australia’s S & P / ASX 200 jumped 1 percent.

The gains marked a reversal from weak Asian markets on Thursday on the back of this week’s U.S. inflation data, which showed consumer price rose at their fastest rate in 13 years in April.

This reading, which exceeded economists’ expectations, pushed Wall Street stocks to their worst day in months on Wednesday. But the benchmark for US stocks, the S&P 500, bounced to close 1.2 percent more the next day.

The 10-year US Treasury yield was little changed at 1.654 percent during Asian trading on Friday after falling 0.04 percentage point in the US overnight.

Futures on the S&P 500 rose 0.5% while those on London’s FTSE 100 rose 0.7%.

Global markets have been strained as investors and policymakers signs of higher inflation against the backdrop of a global economic recovery from the coronavirus pandemic.

This prompted investors to fear that the US economy could overheat as a result of budget support and that the Federal Reserve would be forced to tighten monetary policy.

“While interest rates are expected to remain accommodative in the near term, inflationary pressures are expected to heat up as the US economy continues to return to normalized levels,” said David Chao, global market strategist at the manager of Invesco assets. “The Fed could be forced to react as soon as possible.”

Commodities, which have significantly rallied in recent weeks, weakened on Friday. Brent, the international benchmark for oil, fell 0.5% to $ 66.70 per barrel. US marker West Texas Intermediate fell 0.5 percent to $ 63.50 a barrel.

The Colonial pipeline, an essential fuel artery in the United States, resumption of operations Wednesday after being closed at the end of last week by a cyberattack.

Gold, which some investors see as a hedge against inflation, fell 0.3% to trade at $ 1,821.8 an ounce.

Additional reporting by Daniel Shane in Hong Kong

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