Australia

Australian shares are expected to edge lower today following Thursday’s losses for US indices. January producer price data confirmed that inflation remains stubbornly elevated. The British FTSE 100 reaches a milestone.

ASX futures were pointing 15 points or 0.2% down as of 8:00am on Friday, suggesting a dip at the open.

US stocks fell Thursday after inflation and jobs data came in hotter than expected, increasing concerns that the end of the Federal Reserve's tightening campaign is nowhere near.

The S&P 500 dropped 1.4%. The Dow Jones Industrial Average slipped 1.3%, while the tech-focused Nasdaq Composite lost 1.8%.

Supplier prices rose 0.7% in January from the prior month, the Labor Department said Thursday, the biggest gain since last summer. Economists polled by The Wall Street Journal had expected a 0.4% increase. Meanwhile, jobless claims data showed little signs of the labor market cooling.

In commodity markets, Brent crude oil shed 0.74% to $US84.75 a barrel while gold edged up 0.14% to US$1,838.49.

In local bond markets, the yield on Australian 2 Year government bonds edged lower to 3.43% while the 10 Year edged higher to 3.75%. In the US, the yield on 2 Year Treasury notes increased to 4.64% while the 10 Year leaped to 3.87%.

The Australian dollar edged down slightly from its previous close of 69.03 US cents to 68.98. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, edged up to 96.96.

Asia

Chinese stocks ended lower, extending Wednesday's losses as optimism over the post-Covid reopening continued to sink, even as pressure to take profits persisted. The benchmark Shanghai Composite Index fell 1.0% to settle at 3249.03, while the Shenzhen Composite Index was down 1.7% at 2150.23. The tech-heavy ChiNext Price Index dropped 1.4% to 2512.50. Makers of electricity-related equipment such as transmission and storage units led the losers as the sector pulled back from its recent rally, which had been fueled by hopes for increased policy support for the industry. Chip manufacturers also retreated after strong gains earlier this month on hopes that the commercialization of artificial intelligence would drive demand for hardware. ShiJiaZhuang Kelin Electric dropped 10%, Hexing Electrical shed 7.0% and TongFu Microelectronics was down 5.3%.

Hong Kong's benchmark Hang Seng Index finished 0.8% higher at 20987.67, reclaiming Wednesday's losses, lifted by tech stocks and consumption companies. The Hang Seng Tech Index was 1.8% higher after US filings showed high-profile investors Michael Burry and David Tepper have placed new bets on Alibaba's ADSs and JD.com's ADRs. Alibaba Group Holding was 1.2% higher and JD.com rose 5.25%. Consumption companies rebounded after Chinese President Xi pledged to boost consumption and investment in an article published Wednesday. Shares of Haidilao International Holding were 1.3% higher and Haier Smart Home increased 1.4%.

Japan's Nikkei Stock Average rose 0.7% to close at 27696.44, led by auto, utilities and consumer stocks. Asian investors appear to have priced in steady Fed rate increases while strength in consumer demand seems to precede fears of elevated rates, Priyanka Sachdeva, market analyst at Phillip Nova, said in an email. Nissan Motor rose 4.1% and Subaru added 3.1%, while Pan Pacific International gained 4.0% and Kansai Electric Power climbed 3.4%.

India's benchmark Sensex index closed 0.1% higher at 61319.51, buoyed by positive sentiment, following strong January US retail sales numbers, ICICI Direct Research analysts said in a note. Gains were seen across sectors. Tech Mahindra closed 5.6% higher, while Nestle India added 1.6% and Tata Steel gained 1.5%. Decliners included Hindustan Unilever, which fell 0.9%.

Europe

European indices rose on the back of gains for telecom shares and banks after stronger-than-expected US producer-price index data. The pan-European Stoxx Europe 600 added 0.3%, the German DAX gained 0.2% and the French CAC 40 advanced 0.9%. Commerzbank, Societe Generale and Unicredit were the biggest pan-European banking risers and Orange, BT, Telecom Italia and Vodafone gained in telecoms.

US PPI data came in higher than expected and the Philadelphia Federal Manufacturing Index showed activity contracting at its sharpest pace in almost three years. "Worrying PPI inflation and Philly Fed manufacturing data dragged US stocks lower this afternoon, with the dollar rising," IG analyst Joshua Mahony wrote.

The British FTSE 100 added 0.2% at 8012.53 on Thursday, the first time in its history that the index has closed at more than 8000, FTSE Russell said in a note. British Gas owner Centrica led the risers, ending up 5.7%, after reporting adjusted EBITDA of GBP3.51 billion, restarting its final dividend and extending its share buyback program. Standard Chartered followed, finishing 4.1% higher, after fourth-quarter profit rose as higher interest rates boosted the income. BT Group was the third highest riser, ending 2.9% in the green.

North America

US stocks fell Thursday after inflation and jobs data came in hotter than expected, increasing concerns that the end of the Federal Reserve's tightening campaign is nowhere near.

The S&P 500 dropped 1.4%. The Dow Jones Industrial Average slipped 1.3%, while the tech-focused Nasdaq Composite lost 1.8%.

Supplier prices rose 0.7% in January from the prior month, the Labor Department said Thursday, the biggest gain since last summer. Economists polled by The Wall Street Journal had expected a 0.4% increase. Meanwhile, jobless claims data showed little signs of the labor market cooling.

"It is increasingly difficult to see a significant US recession on the horizon," said Christopher Smart, chief global strategist at Barings and head of the Barings Investment Institute. "Much of the labor market continues to be white hot."

After a blazing record start to the year, stocks have limped along in recent weeks. Investors had grown optimistic that the fight against inflation was making strong progress, sending speculative assets higher. But a raft of data showed the economy was still surging on several fronts, including a booming jobs market, strong consumer spending and stubborn consumer-price increases.

"We saw a lot of buying from retail investors during the January rally; there was a general feeling that the worst was behind us," said Anthony Denier, chief executive of retail brokerage Webull. "That has obviously changed."

Recent economic prints served as a reminder that tamping down pricing pressures won't be straightforward. Wagers on where the benchmark interest rate would peak were revised higher, and hopes have faded that central bankers might cut rates soon.

"It's certainly possible that inflation will be stuck above 4% as the year ends," said Barings's Mr. Smart. "The Fed may not need to raise rates much more than currently expected, but it may not be able to cut until well into next year."

While the health of the economy remains squarely in focus, investors continue to parse companies' fourth-quarter earnings. Shares of streaming giant Roku surged more than 17% on Thursday, set for its best day since 2021 after showing signs of improvement in the advertising market. Cisco Systems stock rose more than 5%, on pace for its highest close since last May. The networking-equipment company improved its future guidance and beat Wall Street estimates.

The reception of Shopify's outlook wasn't as positive. Shares of the e-commerce company fell 16% after posting earnings, its worst daily decline in a year.