Australia

Australian shares are pointing down this morning following a mixed session on Wall Street. Investors were hesitant to move in either direction following the April CPI report, which confirmed that inflation is cooling off slowly.

ASX futures had given up 14 points or 0.2% as of 6:00am on Thursday, suggesting a dip at the open.

US stocks closed mixed Wednesday after consumer prices in the US rose at a 4.9% annual pace in April, slowing slightly from March and coming in below economists' expectations.

The S&P 500 index ended up 0.2% while the Dow Jones Industrial Average lost 0.2% and the Nasdaq Composite fell 0.6%.

Investors had a mixed reaction to the April consumer-price index, which showed that inflation’s grasp on the economy continues to ease slowly. The annual core CPI, which excludes food and energy, rose 5.5% in April, down from 5.6% in March, while the overall annual CPI hinted down to 4.9% from 5.0% last month.

In commodity markets, Brent crude oil dipped 1.0% to US$76.69 a barrel while gold edged down 0.2% to US$2,030.87.

Australian government bonds were little changed, with the 2 Year yield moving up to 3.25% and the 10 Year yield remaining at 3.45%. US Treasury notes were mixed, with the 2 Year yield slipping to 3.90% and the 10 Year yield hinting higher to 3.44%.

The Australian dollar bounced up to 67.76 US cents from its previous close of 67.59. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, moved down to 95.51.

Asia

Chinese shares closed mixed on Wednesday, extending a muted trading pattern in recent sessions after a strong rally the previous week. The benchmark Shanghai Composite Index shed 1.2% to settle at 3319.15 while the Shenzhen Composite Index edged up by 0.3% and the ChiNext Price Index added 0.7%. Automakers led the gains after official sales data showed that sales volume exceeded production volume in April. This is a sign that distributors are making progress in clearing up their inventories, which could underpin better sales momentum down the road, Citi analysts explained. Automakers' gains offset losses among banks, which pulled back from their earlier strength. Great Wall Motor gained 6.75% while Bank of China ended 5.5% lower.

Hong Kong's Hang Seng Index fell 0.5% to 19762.20 as recent weakness continued. Analysts cited China's April imports data, which showed a surprise on-year decline, as a potential factor fuelling concerns about China’s slow post-reopening recovery. A mixed bag of sectors weighed on the market, with developer Longfor shedding 3.9%, exporter Shenzhou International down 3.3% and sportswear maker Li Ning losing 3.1%.

Japan's Nikkei Stock Average fell 0.4% to close at 29122.18, dragged by pharmaceutical companies and steelmakers amid concerns over US debt-ceiling talks. Ono Pharmaceutical lost 6.15%, Shionogi dropped 3.9% and Daiichi Sankyo was down 3.3% while Nippon Steel fell 9.2% and Kobe Steel shed 3.7%. Meanwhile, Toyota Motor rose 0.8% after its Q4 net profit beat the Y518.11 billion expected in a poll by Visible Alpha analysts. Nitori Holdings added 4.6% after projecting a 5.1% increase in fiscal-year net profit.

India's benchmark Sensex index closed 0.3% higher at 61940.20. Sentiment remained uncertain as investors awaited the release of US CPI data, ICICI Direct Research analysts said in a note. Gainers included IndusInd Bank, which was 2.8% higher; Power Grid Corp. of India, which rose 1.8%; and Bajaj Finance, which was 1.2% higher. Decliners included Infosys, which fell 0.6%.

Europe

European and US blue-chip shares dropped after data showed slightly lower-than-expected US inflation in April, though tech stocks rallied. The pan-European Stoxx Europe 600 fell 0.5%, the German DAX shed 0.4% and the French CAC 40 backtracked 0.5%, with banks and insurers among the continent’s biggest fallers. US consumer price inflation eased to 4.9% versus market expectations of 5%.

"Stripping through the noise, the CPI report shows a clear downward trend in inflation while last week's data evidenced a resilient labor market," Lazard chief market strategist Ronald Temple wrote. "If next month's data looks like these reports, the Fed's inclination to pause the rate-hike cycle will be validated."

Meanwhile, in London, the FTSE 100 closed down 0.4%, in line with European peers. Consumer goods stocks weighed on the British index as investors feared that the Bank of England and the European Central Bank still have further room for interest rate hikes, IG Group chief market analyst Chris Beauchamp explained in a note.

"Having bested their US counterparts in the first quarter, it looks like investors are being pickier about chasing the rally in the FTSE 100, Dax and others," Beauchamp added. Melrose Industries shares led the table, up 4.8% after saying its performance is materially ahead of expectations. Among the top fallers, Ocado fell 4.2%, followed by InterContinental Hotels and Pearson, down 3.6% and 3.2%, respectively.

North America

US stocks closed mixed Wednesday after consumer prices in the US rose at a 4.9% annual pace in April, slowing slightly from March and coming in below economists' expectations.
The S&P 500 index ended up 0.2% while the Dow Jones Industrial Average lost 0.2% and the Nasdaq Composite fell 0.6%.

Investors had a mixed reaction to the April consumer-price index, which showed that inflation’s grasp on the economy continues to ease slowly. The annual core CPI, which excludes food and energy, rose 5.5% in April, down from 5.6% in March, while the overall annual CPI hinted down to 4.9% from 5.0% last month.

Morningstar’s Chief US Economist Preston Caldwell agrees with most market participants, who broadly expect the Federal Reserve to hit the brakes on monetary policy tightening. “We still think that the Fed will pause on further rate hikes for now, so long as inflation doesn’t show signs of accelerating, which isn’t manifest in today’s report,” Caldwell said. Following today’s CPI report, most investors anticipate the current federal-funds rate of 5.00-5.25% to remain in place for the foreseeable future.

Among individual stocks, Upstart Holdings gained 35% after the artificial intelligence lending platform issued an upbeat revenue outlook for its fiscal second quarter and said it would break even on adjusted earnings before interest, taxes, depreciation, and amortization in the period. The company also said it secured multiple long-term funding agreements that "together expected to deliver more than $2 billion to the Upstart platform over the next 12 months."

Airbnb tumbled 11% after the short-term rental company reported a first-quarter profit but issued cautious guidance for the second quarter, saying that growth in nights and experiences "will have unfavorable year-over-year comparisons" as the company overlaps "pent-up 2022 demand following the Covid omicron variant."

Axon Enterprise was the S&P 500's leading decliner, falling 15%, after the Taser maker reported first-quarter earnings and sales that beat Wall Street estimates but gross margins in the period declined.