Australia

Australian shares are set to gain today following a rise on Wall Street as investors hope that anticipated data on cooling consumer prices will indicate an easing of interest rate hikes.

ASX futures were up 34 points or 0.47% at 7218 as of 7:00am on Tuesday, pointing to a gain at the open.

US stocks climbed Monday as investors geared up for a pivotal week for markets that will include consumer-price data and a Federal Reserve policy update.

The S&P 500 gained 1.3% and the Dow Jones Industrial Average added 1.5%. The Nasdaq Composite rose 1.1%. Hopes that the Federal Reserve was winning the fight against inflation helped indices to rally for most of November, sending the broad S&P 500 to a three-month high. Inflation data have, for the most part, shown signs of easing, raising hopes that Fed officials will begin to slow the pace of their interest-rate rises.

In commodity markets, Brent crude oil rose 2.55% to $US78.04 a barrel and gold declined 0.93% to US$1,780.56.

In local bond markets, the yield on Australian 2 Year government bonds edged up to 3.07% while the 10 Year rose to 3.38%. Overseas, the yield on 2 Year US Treasury notes increased to 4.04% while the yield on the 10 Year US Treasury notes declined to 3.61%.

The Australian dollar hit 67.34 US cents down from the previous close of 67.94. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, rose to 98.03.

Asia

China stocks sank, with sentiment hurt by worries about potential rate hikes after global central bank meetings. The property sector and related sectors, including furniture manufacturers, weighed on the market. China Vanke fell 5.0% while Poly Developments dropped 4.3%, reversing Friday's gains. Jason Furniture (Hangzhou) Co. slipped 3.7%. Among the gainers were pharmaceuticals and transportation. Zhangzhou Pientzehuang Pharmaceutical Co. increased by 4.5% and Shanghai International Airport was 1.2% higher. The Shanghai Composite Index fell 0.9% to 3179.04, the Shenzhen Composite Index declined 0.7%, and the ChiNext Index was 0.8% lower.

Hong Kong's Hang Seng Index fell 2.2% to 19463.63, retreating from a three-month high, as Chinese property and tech stocks dragged. Country Garden Services led declines among blue chips, sliding 17% after its chairwoman pared her stake. Longfor Group lost 11% and Country Garden Holdings weakened 5.2%. The Hang Seng Tech Index gave up 4.0%, with Meituan and Baidu down more than 6%. Sunny Optical slumped 13% after sluggish November shipment figures, while Li Auto skidded 12% after its 3Q results. Some lenders outperformed. HSBC rose 0.8% and BOC Hong Kong gained 1.0%. Investors are watching US consumer inflation data and the Fed decision due this week.

Japanese stocks ended lower, dragged by falls in electronics and trading companies, as concerns persist over the US interest-rate outlook. Lasertec dropped 4.5% and Mitsubishi Corp. lost 1.8%. The Nikkei Stock Average declined 0.2% to 27842.33.

Europe

European stocks fell in closing trade as worries about the region's energy crisis and rising Covid-19 cases in China dampen market sentiment.

The pan-European Stoxx Europe 600 fell 0.5%, the British FTSE 100 declined 0.4%, the German DAX dropped 0.5%, and the French CAC 40 shed 0.4%.

Markets are reacting to a sharp spike in natural gas prices as a wave of cold weather hits Western Europe, IG analyst Joshua Mahony writes. "Improved sentiment around Chinese efforts to reopen appear to be swiftly faltering, with concerns over a dramatic surge in Covid cases bringing the potential for further restrictions and protests."

North America

US stocks climbed Monday as investors geared up for a pivotal week for markets that will include consumer-price data and a Federal Reserve policy update.

The S&P 500 gained 1.3% and the Dow Jones Industrial Average added 1.5%. The Nasdaq Composite rose 1.1%. On Friday, all three indices ended the week lower as stronger-than-expected producer-price data prompted jitters about the inflation outlook.

Hopes that the Federal Reserve was winning the fight against inflation helped indices to rally for most of November, sending the broad S&P 500 to a three-month high. Inflation data have, for the most part, shown signs of easing, raising hopes that Fed officials will begin to slow the pace of their interest-rate rises.

"We think we've seen peak Fed and peak inflation," said Jason Ware, partner and chief investment officer for Albion Financial Group. "We still have tightening to come, but most of it is behind us. We are much closer to the end than the beginning."

The coming week could be make-or-break for those hopes, with US consumer-price index data due Tuesday ahead of several central bank meetings. The Fed is set to deliver its policy decision on rates as well as its latest economic projections Wednesday, with most investors expecting the bank will raise its benchmark interest rate by half a percentage point. The European Central Bank and the Bank of England are due to meet and decide on interest rates Thursday.

"There's been a sea change in terms of the underlying sentiment and primarily that has been driven by the improvement in the CPI numbers turning south," said Charles Diebel, head of fixed income at Mediolanum International Funds. "Given how jumpy the market has been, a disappointment in the CPI reading will get a big negative reaction."

The energy and utilities sectors were the best performing groups in the S&P 500, both rising more than 1% and continuing their trend of outperformance this year.