World Stocks Mixed Ahead of US Inflation Data

Tokyo, Feb 13 (AP) European benchmarks slipped and Asian shares mostly finished higher on Tuesday as investors awaited an update on U.S. consumer inflation that might help set the Federal Reserve's policy on interest rates.

France's CAC 40 slipped nearly 0.2 per cent to 7,678.07. Germany's DAX shed 0.3 per cent to 16,982.64. Britain's FTSE 100 fell 0.2 per cent to 7,562.00. The future for the S&P 500 lost 0.3 per cent while that for the Dow Jones Industrial Average was 0.2 per cent lower.

In Asia, Japan's benchmark Nikkei 225 added 2.9 per cent to finish at 37,963.97, briefly topping 38,000 for the first time in 34 years. Australia's S&P/ASX 200 lost earlier gains, edging 0.2 per cent lower to 7,603.60. South Korea's Kospi jumped 1.1 per cent to 2,649.64.

Markets were closed in China, Hong Kong and Taiwan for the Lunar New Year holiday.

Japan's producer price index data showed a 0.2 per cent increase from a year ago, while remaining flat month-on-month. That may relieve pressure on the central bank to alter its longstanding ultra-lax monetary policy and raise its benchmark interest rate from minus 0.1 per cent.

“The tame number may still suggest limited passthrough to consumer prices and may offer room for the Bank of Japan to keep to its wait-and-see for now,” Yeap Jun Rong, a market analyst at IG, said in a report.

The next big event for markets could be Tuesday's update on inflation across the United States, which economists expect to show a drop back below the 3 per cent level.

One worry for the market has been uncertainty about just how much danger lurks for the economy in the loans and other holdings banks have on their balance sheets that are tied to commercial real estate.

Inflation has been cooling enough that the Federal Reserve has hinted it may cut its main interest rate several times this year. Such cuts typically juice financial markets and the economy, and they would release pressure that's built up since the Fed has taken its main interest rate to the highest level since 2001.

After earlier hoping cuts to rates could begin as soon as March, traders have since pushed their forecasts out to May or June. Reports showing the US economy and job market remain remarkably solid, along with some comments from Fed officials, have been forcing the delays.

In energy trading, benchmark US crude rose 27 cents to USD 77.19 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 23 cents to USD 82.23 a barrel.

In currency trading, the U.S. dollar rose to 149.67 Japanese yen from 149.34 yen. The euro cost USD 1.0764, down from USD 1.0774. (AP)