Sat. Jan 28th, 2023

Global markets drifted lower Monday, as investors considered the outlook for U.S. inflation and international economic recovery.

In early afternoon trading in Hong Kong, the local benchmark Hang Seng Index lost 0.6%. Benchmarks in Japan and Australia also slipped, while U.S. equity futures ticked up about 0.1%. Some other markets, including South Korea and Taiwan, advanced.

U.S. markets are closed Monday for Memorial Day, and their U.K. equivalents are also closed for a public holiday. For the whole of May, the S&P 500 recovered from inflation-driven volatility earlier in the month to record its fourth consecutive monthly gain.

Markets were likely to remain unsettled as investors try to gauge the prospects for U.S. growth and price rises from data points such as payroll figures due this Friday, said Mary Nicola, a fund manager at PineBridge Investments. “Everyone is focused on inflation,” she said.

Ms. Nicola said a key question for investors was how this would affect Federal Reserve policy, including the time frame in which the central bank might begin tapering, or reducing its asset purchases. She added that her firm was overweight European and Japanese stocks—holding more of these shares than the benchmarks it tracks—given it believed both markets were attractively valued and stood to benefit from a world-wide economic recovery.

In mainland China, the benchmark CSI 300 pared early losses to fall 0.1%. An official purchasing managers index for the manufacturing sector came in at 51.0 for May—down slightly from a reading of 51.1 a month earlier, but still above the 50-mark that separates expansion from contraction.

Among individual stocks, shares in Meituan jumped more than 7% in Hong Kong. Late on Friday, the Chinese food-delivery giant reported better-than-expected revenue of 37 billion yuan, the equivalent of $5.8 billion, for the three months ended March. Financial stocks retreated, with

AIA Group

falling 4% and

HSBC Holdings

’ Hong Kong shares dropping 3%.

In the currency markets, the dollar inched lower, with the WSJ Dollar index dropping less than 0.1% to 85.19. China’s yuan extended its rally, strengthening slightly to hit a fresh three-year high below 6.36 a dollar in the offshore market.

Bitcoin fell about 2% to $34,571.

Write to Xie Yu at [email protected]

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By rahul