Asia shares drift lower, wait on U.S. inflation

SYDNEY (Reuters) – Asian share markets took a step back on Wednesday as the White House took a tough line on trade talks with China, while a looming reading on U.S. inflation could shuffle the odds for an early cut in interest rates there.

FILE PHOTO: A passerby walks past in front of a stock quotation board outside a brokerage in Tokyo, Japan, May 10, 2019. REUTERS/Issei Kato

Data on Chinese inflation showed the annual pace picked up to a 15-month high of 2.7%, but mainly because of surging pork prices. Excluding food, inflation rose only 1.6% and suggested there was plenty of scope for more stimulus.

Market moves were modest, with MSCI’s broadest index of Asia-Pacific shares outside Japan off 0.5% after two days of gains.

Japan’s Nikkei dipped 0.1%, while E-Mini futures for the S&P 500 hardly budged. Shanghai blue chips eased 0.8% following a 3% jump the day before.

The Hong Kong market lost 1.5% as thousands of demonstrators stormed roads next to government offices to protest against a proposed extradition bill.

“The impact was short lived in the past,” noted Alex Wong, director at Ample Finance Group in Hong Kong.

“This time people will look at how the U.S. reacts to this kind of news. The U.S. attitude toward Hong Kong and China are also not the same.”

President Donald Trump said on Tuesday he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees to four or five “major points” which he did not specify.

He also took

Keep reading this article on Reuters Business.

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