World shares mixed as China reports jump in inflation

BANGKOK — World shares are mixed after China reported a big jump in factory gate prices at a time when inflation is a top investor concern.

Shares fell London, Frankfurt, Tokyo and Hong Kong but rose in Paris and Shanghai. U.S. futures edged higher.

China’s producer price index, which measures prices of raw goods and services, jumped 9% from a year earlier in May, the fastest increase since 2008 and above analysts’ forecasts, the government said.

However, the headline consumer price index rose a more modest 1.3%, less than expected. Inflation in the first five months of the year averaged 0.4%.

Surging prices for oil and other commodities and manufacturing components such as semiconductors were the main factor behind the jump in producer prices, Julian Evans-Pritchard of Capital Economics said in a commentary. He noted prices of electronics products, in strong demand during the pandemic, have eased.

“This adds to signs from the latest trade data that global demand for Chinese consumer goods may be starting to drop back as distortions to spending patterns caused by the pandemic reverse,” he said.

For now, the Chinese government appears to be focusing on resolving supply side constraints driving higher prices and less worried about a potential spiral in prices due to surging consumer demand, economists say.

Investors are more concerned with U.S. inflation data due out Thursday and what it might augur for the current regime of ultra-low interest rates and other market-supporting policies.

Germany’s DAX edged 0.1% lower to 15,631.65 while the CAC 40 in Paris added 0.1% to 6,557.69. In London, the FTSE 100 dropped 0.6% to 7,052.75. U.S. futures edged higher, with the contract for the S&P 500 up 0.1% and that for the Dow industrials barely changed.

In Asia, Tokyo’s Nikkei 225 index fell 0.4% to 28,860.80 and the Kospi in Seoul also fell 0.9% to 3,216.18. Hong Kong shed 0.1% to 28,742.63, while the S&P/ASX 200 in Sydney gave up 0.3% to 7,270.20. The Shanghai Composite index advanced 0.3%, to 3,585.84.

U.S. stock indexes meandered to another uneven finish Tuesday, with investors awaiting U.S. inflation data. But some corners of the market — cryptocurrencies and some social media-hyped stocks — kept traders busy.

The S&P 500 inched up less than 0.1% to 4,227.26. It remains close to its May 7th all-time high and has barely moved the last two days. The Dow Jones Industrial Average slipped 0.1% to 34,599.82, while the Nasdaq mustered a 0.3% gain, closing at 13,924.91.

Smaller company stocks once again outpaced the broader market, with the Russell 2000 index of smaller companies gaining 1.1% to 2,343.76.

Wendy’s jumped 25.9% as it appeared to join a batch of companies favored by individual investors taking cues from social media forums. Clover Health Investments soared 85.8%. Other companies whose stock values have gyrated sporadically include AMC Entertainment, Blackberry and GameStop.

Cryptocurrency traders appeared to be in a selling mood. Bitcoin and other popular digital currencies, including Ethereum and Dogecoin, all fell sharply, according to Coindesk. Bitcoin, which climbed above $60,000 early this year, slid 7% to $32,690.

Shares in Fastly, an internet cloud services provider, climbed 10.8% after it said it had addressed an internal problem that caused dozens of websites around the globe to go down briefly, including the home page of Britain’s government and The New York Times.

The path of inflation could determine whether central banks continue to generously support economies or pull back, but the pandemic is causing disruptions and distortions that add to the uncertainty.

Aside from surging prices of raw materials, fuel and other items needed for manufacturing, factories are struggling to keep up with demand as the pandemic recedes in many places. That has pushed up prices of everything from food to household staples.

In other trading, U.S. benchmark crude oil gained 42 cents to $70.47 per barrel in electronic trading on the New York Mercantile Exchange. It picked up 82 cents to $70.05 per barrel on Tuesday. Brent crude, the international standard, added 43 cents to $72.64 per barrel.

The U.S. dollar slipped to 109.47 Japanese yen from 109.49 yen. The euro rose to $1.2187 from $1.2174 yen.