US inflation cools, Wall Street hits record high as Asia markets turn mixed

Shares mostly declined across Asia on Friday, while US stock futures remained little changed after US inflation data showed a better-than-expected improvement in July.

Tokyo's Nikkei 225 index gained 0.3 per cent to 68,533.85, while the Kospi in South Korea rose 1.3 per cent to 6,924.74.

In Hong Kong, the Hang Seng lost 1 per cent to 25,137.87, while the Shanghai Composite index fell 0.5 per cent to 3,908.05. Australia's S&P/ASX 200 slipped 1.1 per cent to 9,090.90.

Taiwan's Taiex lost 0.2 per cent, while India's Sensex fell 0.5 per cent.

Wall Street hits fresh record

On Thursday, the S&P 500 rose 0.7 per cent to an all-time high close of 7,798.99. The Dow Jones Industrial Average added 0.1 per cent to 53,839.99, while the Nasdaq composite climbed 0.8 per cent to 26,803.03.

Wall Street was supported by data showing that US wholesale prices were 4.7 per cent higher last month than a year earlier. Although inflation remained elevated, the figure was lower than June's 5.5 per cent and slightly below economists' expectations.

Inflation data eases Fed rate concerns

The latest inflation figures have eased concerns about another near-term interest rate hike by the US Federal Reserve.

If inflation continues to moderate, the Fed could decide to hold off on raising rates. Higher interest rates can help contain inflation but also slow economic activity and make borrowing more expensive.

“The disinflation ducks are starting to line up, and with oil also backing off, the market has steadily stripped away the case for another near-term Fed hike,” Stephen Innes of SPI Asset Management said in a commentary.

Any rate increase would be the first by the Fed in more than three years. It could also put the central bank at odds with US President Donald Trump, who has repeatedly called for lower interest rates.

Oil prices steady after recent decline

Oil prices were holding steady on Friday after declining in recent sessions. Brent crude, the international benchmark, fell 2.1 per cent before trading nearly unchanged at USD 87.06 a barrel early Friday.

Prices have been volatile in recent weeks, moving between USD 72 and USD 102 in July as expectations shifted over whether Trump could reach an agreement with Iran that would allow oil tankers to move freely through the Strait of Hormuz.

A seasonal slowdown in trading has reduced activity, but concerns over oil supplies remain.

Clashes between Iran-backed Houthi rebels and government forces in Yemen have also raised concerns that the country's civil war could intensify and create another source of instability in the Middle East.

Dollar, Euro trade mixed

In early Friday trading, the US dollar fell to 159.32 Japanese yen from 159.50 yen.

The Euro strengthened to USD 1.1543 from USD 1.1530.