Australia

Australian shares are set to rise, shrugging off a mixed result on Wall Street where a big drop at Netflix came alongside positive reports from Tesla and Procter & Gamble hinting corporate America is weathering higher inflation and slowing growth.

ASX futures were up 30 points or 0.4% at 7570 as of 8.00am on Thursday, suggesting a positive start to the trading day.

The S&P 500 slipped less than 0.1%, a day after the broad-market index closed up 1.6%. The tech-focused Nasdaq Composite Index fell 1.2%, weighed by the biggest one-day fall in Netflix since 2004 after its results disappointed investors. The Dow Jones Industrial Average advanced 0.7%.

Investors are scrutinising US reporting season for evidence higher inflation and slowing growth is squeezing corporate profits, the engine room of the share market. Tesla beat Wall Street profit estimates thanks to a bumper sale of government credits amid signs it is mostly avoiding the supply chain problems wracking the car industry. Procter & Gamble reported its biggest jump in sales in two decades. IBM rose on stronger-than-expected revenue growth from its cloud business.

A drop in subscribers and the promise of more losses to come sent Netflix down 35% on Wednesday. The streaming giant has declined 62% this year.

The US Federal Reserve released on Wednesday its latest beige book report, an anecdotal review of economic conditions across the country. It highlighted higher costs and scarce workers remain a challenge for businesses.

Bond market selling paused overnight with yields across the curve retreating as some market participants bet inflation is beginning to peak. The US Treasury 10 Year yield fell to 2.83% while the 2 Year edged down to 2.58%.

Locally, the S&P/ASX 200 closed less than 0.1% higher at 7569.2 amid gains by health and travel stocks.

The benchmark jumped 0.8% ahead at the open but steadily gave up most of its gains amid weakness from commodity stocks.

Rio Tinto dropped 2.8% after what analysts said was a soft 1Q report, while BHP and Fortescue gave up 1.6% and 0.2%, respectively.

The health sector rose 2.6%, powered by Ramsay Healthcare's 24% surge on a takeover proposal by a KKR-led consortium.

Travel agents Flight Centre, Webjet and Corporate Travel Management put on between 2.2% and 3.6% after Australia's two most populous states further eased Covid-19 restrictions.

Prime Minister Scott Morrison took on Labor leader Anthony Albanese in the first debate of the election campaign on Wednesday night. The audience of undecided voters gave the win to Albanese by a narrow margin.

In commodity markets, iron ore rose 0.6% to US150.07 per tonne; gold futures added 0.1% to $1,958.40; Brent crude oil edged down 0.4% to US$106.80.

In local bond markets, the yield on the Australian 10 Year bond continued moving higher to 3.10%, levels not seen since 2015.

The Australian dollar was buying 74.46 US cents as of 7.00am, up from the previous close of 73.74. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, declined to 92.90 in line with falling US bond yields.

Asia

Chinese stocks ended sharply lower, as the market remained under pressure amid rising concerns over a worse economic slowdown in 2Q. The benchmark Shanghai Composite Index fell 1.3% to settle at 3151.05, while the Shenzhen Composite Index lost 1.7% to 1985.65. The tech-heavy ChiNext Price Index continued to underperform, losing 3.7% to end at 2363.65. Coal producers led the downturn, extending recent losses, after Beijing officials signalled intentions to curb excessive coal-price increases.

Hong Kong stocks ended the session lower, following losses in the A-share market that extended the downturn marked so far this week. The benchmark Hang Seng Index edged down 0.4% to settle at 20944.67. KGI Securities attributes the continued weakness to recent sharp increases in US Treasury yields and the strengthening dollar, which could drag on investor interest in Asian equities. Property companies, including management companies and developers, led the losses. Country Garden Services dived 11% and China Resources Land slumped 6.9%.

The Nikkei Stock Average closed 0.9% higher at 27217.85 with auto stocks leading the gains. Honda Motor gained 3.6%, Toyota Motor added 3.7% and Nissan Motor advanced 4.7%. Financial stocks were also higher, with Sumitomo Mitsui Financial Group rising 1.6% and Mitsubishi UFJ Financial Group gaining 2.5%. China's Covid-19 situation and the Russian-Ukraine conflict remain in focus.

Europe

European markets closed firmly in positive territory as inflation-fuelled jitters eased.

The pan-European Stoxx Europe 600 rose 0.8%, the French CAC 40 and the German DAX advanced more than 1%.

"It's been a generally positive day for markets, notwithstanding the losses seen in Netflix shares," says IG analyst Chris Beauchamp. "Stock markets on both sides of the Atlantic continue to make gains, indicative of a general calming of nerves around inflation and central-bank tightening."

London’s FTSE 100 index finished Wednesday up 0.32% despite weakness in the basic resource sector, with a much more positive session after Tuesday's lacklustre performance.

The hesitancy of early April appears to have faded, and investors continue to move back into stocks despite the mixed progress of earnings season thus far, IG Group PLC chief market analyst Chris Beauchamp says in a research note.

North America

US stock indexes posted mixed results and bond yields paused a recent climb as investors assessed the impact of higher inflation on corporate earnings.

The S&P 500 slipped less than 0.1%, a day after the broad-market index closed up 1.6%. The tech-focused Nasdaq Composite Index fell 1.2%. The Dow Jones Industrial Average advanced 0.7%.

Stocks have had a strong start to the week, lifted by earnings reports that showed companies have largely been able to generate growth despite tightening monetary policy and the highest inflation in four decades. Netflix's report after hours on Tuesday disappointed, driving losses in the Nasdaq Composite on Wednesday. Procter & Gamble reported its biggest jump in sales in two decades. Investors are scrutinizing corporate performance in an environment with rising prices.

"We are living in a year of higher inflation and that will cause problems for some companies," said Luc Filip, head of investments at SYZ Private Banking. "What we are trying to assess is really the pricing power of a company, and some will see their profitability come under pressure if they don't have this."

Data last week indicated that consumer-price index rose 8.5% in March from a year earlier, the fastest annual pace since December 1981. Still, some investors and analysts have said recent economic data contains clues that the surge in inflation may be slowing.

"Inflation might remain at high levels, but certainly we might have seen the worst of the year-over-year increases," said Carin Pai, head of portfolio management and head of equity strategy at Fiduciary Trust International.

IBM climbed $9.17, or 7.1%, to $138.32 after it reported stronger-than-expected revenue growth driven by its cloud business. Procter & Gamble rose $4.24, or 2.7%, to $163.65 after it raised its full-year guidance and said demand for its pricier items held up.

The yield on the benchmark 10-year Treasury note edged down to 2.836% from 2.911% on Tuesday, reversing direction after three consecutive days of rises. The 10-year inflation-linked bond yield, a proxy for a benchmark real rate, briefly turned positive in intraday trading for a second day after spending more than two years in negative territory, reaching 0.035% before easing to minus 0.082%.

Netflix shares fell $122.42, or 35% to $226.19, its largest one-day percentage decrease since 2004, after it said its subscriber base shrank by 200,000 in the last quarter and predicted the loss of another two million subscribers this quarter. The S&P 500's communications services sector, of which Netflix is a component, was down 4.1%.

"It is really time to shift the portfolio away from the life at home companies," Mr. Filip said.

Netflix lost about $54.3 billion in market value Wednesday, a drop larger than the bottom seven companies in the S&P 500 combined, according to Dow Jones Market Data. Other streaming companies fell: Paramount dropped $3.12, or 8.6%, to $33.16; Warner Bros. lost $1.48, or 6%, to $23.01; Walt Disney slid $7.33, or 5.6%, to $124.57; and Spotify fell $14.92, or 11%, to close at $122.49.

"Netflix results don't necessarily have broader economic or market implications, especially since it is more company-specific," said Angelo Kourkafas, investment strategist at Edward Jones. Mr. Kourkafas said he has focused on earnings from Procter & Gamble and healthcare-products giant Johnson & Johnson, which reported results Tuesday, to gauge insight into consumer sentiment.

Global benchmark Brent crude lost 45 cents a barrel, or 0.4%, to $106.80. Traders are assessing China's easing Covid-19 restrictions. Road traffic in major cities such as Beijing and Hong Kong has increased, lifting fuel demand, according to consulting firm Rystad Energy.

Natural gas has been volatile recently, climbing to $7.81 per million British thermal units on Monday before falling to $6.9370 on Wednesday.

In economic news, US home prices reached a record $375,300 in March as mortgage-interest rates shot up and a shortage of homes for sale continued to thwart buyers. The Federal Reserve in a report said the US economy grew at a modest pace in early spring amid high inflation and geopolitical instability.