Australia

Australian shares are set to edge lower following yet another dip on Wall Street as investors worry that continued positive economic data will prompt the Federal Reserve to maintain higher interest rates for longer.

ASX futures were down 20 points or 0.3% at 7226 as of 7:00am on Thursday, pointing to a slip at the open.

US stocks wavered, with investors continuing to worry that stronger-than-expected economic data will prompt officials to hold interest rates higher for longer, potentially weighing on the economy next year.

The S&P 500 was down 0.3% in afternoon trading Wednesday, a day after suffering its fourth consecutive day of losses. The tech-focused Nasdaq Composite fell 0.6%. The Dow Jones Industrial Average was off 0.1%.

Stronger-than-anticipated US economic data on Friday and Monday boosted fears that the Federal Reserve will keep interest rates elevated to ensure that inflation ebbs. Investors had hoped that central bankers might slow the pace of interest-rate increases after inflation data showed tentative signs of easing in recent months.

Ron Temple, chief market strategist at Lazard Asset Management, said a strong job market could complicate the Fed's outlook for raising rates, which could propel the central bank to keep interest rates higher for longer.

In commodity markets, Brent crude oil slipped 2.6% to $US77.27 a barrel and gold edged up 0.95% to US$1,787.81.

In local bond markets, the yield on Australian 2 Year government bonds was flat at 3.06% while the 10 Year fell to 3.35%. Overseas, the yield on 2 Year US Treasury notes declined to 4.26% and the yield on the 10 Year US Treasury notes was down at 3.42%.

The Australian dollar hit 67.29 US cents down from the previous close of 66.85. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies edged down to 97.99.

Asia

Chinese shares ended mixed, with Shenzhen Composite Index and ChiNext Price Index turning positive as Beijing eased a range of Covid-19 restrictions to revive economic growth. The new measures include scrapping the PCR Covid test and ceasing cross-region travel restrictions. This boosted shares of airlines and pharmaceutical companies. Shijiazhuang Yiling Pharmaceutical Co., the producer of drugs that have been recognized by the Chinese government for Covid treatment, rose by the 10% daily limit. Air China and China Eastern Airlines rose by 3.9% and 3.7%, respectively. The energy sector and developers weighed on the market, with PetroChina decreasing by 1.7% and China Vanke falling 3.6%. The Shanghai Composite Index ended 0.4% lower at 3199.62, the Shenzhen Composite Index was up 0.2% and the ChiNext Price Index ended 0.9% higher.

Hong Kong stocks ended lower, as investors continued to take profit after a strong rally in recent days. The benchmark Hang Seng Index fell 3.2% to settle at 18814.82, after hitting a multi-month high earlier this week. Chinese property developers led losses, as the sector pulled back from previous gains. Country Garden dived 15% and Longfor was down 12%. "The market has likely priced in a lot of the optimism over China's pandemic-control relaxation," said KGI analyst Kenny Wen.

Japanese stocks ended lower, dragged by falls in chip-related stocks, as concerns continue about the US interest-rate outlook. Lasertec dropped 5.0% and Tokyo Electron Ltd. Lost 3.8%. The Nikkei Stock Average falls 0.7% to 27686.40. Investors are focusing on economic data and their implications for policy tightening by the world's major central banks.

Europe

European stocks dropped after downbeat Asia trading. The pan-European Stoxx Europe 600 fell 0.5%, the British FTSE 100 retreated 0.4%, the French CAC 40 fell 0.4%, and German DAX shed about 0.6%.

"News that China will ease a host of Covid restrictions, including use of quarantine centers and the need for a negative PCR test to travel, has failed to move investors," IG analysts wrote. "Markets are fretting about US growth, with warnings from US banks about a recession next year putting traders into a risk-off frame of mind."

North America

US stocks wavered, with investors continuing to worry that stronger-than-expected economic data will prompt officials to hold interest rates higher for longer, potentially weighing on the economy next year.

The S&P 500 was down 0.3% in afternoon trading Wednesday, a day after suffering its fourth consecutive day of losses. The tech-focused Nasdaq Composite fell 0.6%. The Dow Jones Industrial Average was off 0.1%.

Stronger-than-anticipated US economic data on Friday and Monday boosted fears that the Federal Reserve will keep interest rates elevated to ensure that inflation ebbs. Investors had hoped that central bankers might slow the pace of interest-rate increases after inflation data showed tentative signs of easing in recent months.

Ron Temple, chief market strategist at Lazard Asset Management, said a strong job market could complicate the Fed's outlook for raising rates, which could propel the central bank to keep interest rates higher for longer.

"I'm betting on a recession in the second half of next year and that the Fed still can't cut rates because inflation is still well above the 2% number at the end of next year," Mr. Temple said. He said that holding cash, short-duration fixed income and high quality stocks could outperform the broader market next year.

In stocks, Campbell Soup rose 5.5%, on pace for the highest close since 2017, after the company boosted its outlook and said fiscal first-quarter sales rose 15%.

Shares of Carvana fell 38%, with investors growing more worried that the used-car retailer is headed for bankruptcy. Analysts at Wedbush Securities downgraded the stock to "underperform" and argued that the risk of bankruptcy is rising.

Bitcoin fell 1.1% from its late-afternoon ET level Tuesday to trade at $16,798 apiece. Its price has largely traded between $16,000 and $17,000 in recent weeks following the collapse of crypto exchange FTX.