NEW YORK (Reuters) – World stock markets edged higher on Monday as gains on Wall Street and European indexes pushed aside – for now – fears over inflation, regulation and higher corporate taxes.
Investors’ focus now shifts to Tuesday’s U.S. consumer price data, which will give a broad picture of the country’s economic recovery ahead of the Federal Reserve’s meeting next week.
MSCI’s gauge of stocks across the globe gained 0.05%, and the pan-European STOXX 600 index rose 0.29%.
The S&P 500 closed 0.2% higher, ending a five-day losing streak, with the Dow Jones Industrial Average also ending the day higher, up 0.76%. The NASDAQ slipped less than 0.1%.
The dollar climbed to a two-week peak, and oil prices topped 6-week highs.
“European and U.S. equity markets largely shrugged off rising concerns about regulatory dominance in Chinese tech stocks, as focus turns towards US CPI for August,” ANZ Research analysts wrote.
U.S. government bond yields dipped on Monday. The yield on 10-year Treasury notes was down 1.8 basis points at 1.323%.
Asian stocks fell earlier in the day following news of a fresh regulatory crackdown on Chinese firms.
China fired another regulatory shot at its tech giants, telling them to end a long-standing practice of blocking each other’s links on their websites. The Financial Times also reported that China is aiming to break up the payments app Alipay.
The Chinese blue-chip index fell 0.5% and MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.78% lower. Japan’s Nikkei rose 0.22%.
Leading U.S. House of Representatives Democrats said they are seeking to raise the tax rate on corporations to 26.5%, up from the current 21%.
The core reading of the U.S. consumer price index is expected to show a rise of 0.3% in August, down from 0.5% the previous month and 0.9% in June.
The U.S. Federal Reserve is paying close attention to price pressures as it mulls when to begin to reduce its massive bond holdings and how soon to begin lifting rates from near zero. It also remains on the lookout for any signs that price pressures may broaden.
The general air of risk aversion helped lift the dollar index to 92.69, up 0.12%.
Oil prices rose to six-week highs as U.S. output remains slow to return two weeks after Hurricane Ida slammed into the Gulf Coast and worries another storm could affect output in Texas this week.
Brent crude settled up $0.59, or up 0.81%, at $73.51 a barrel. U.S. crude settled up $0.73, or up 1.05%, at $70.45 per barrel.
(Graphic: Global Oil Demand Growth Forecasts, https://graphics.reuters.com/GLOBAL-OIL/lbvgngrzdpq/chart.png)
(Reporting by Sujata Rao in London and Elizabeth Dilts Marshall in New York; additional reporting by Wayne Cole in Sydney and Dhara Ranasinghe in London; editing by Emelia Sithole-Matarise, Will Dunham, Chizu Nomiyama and Dan Grebler)
