Asian shares mostly fall, US futures little changed after US inflation data improves

BANGKOK: Shares mostly declined Friday in Asia and US futures were little changed after US inflation data showed a better-than-expected improvement in July.

Oil prices were holding steady after slipping in recent days.

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. The Shanghai Composite index was 0.5 per cent lower at 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 and the Sensex in India fell 0.5 per cent.

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, and the Nasdaq composite climbed 0.8 per cent to 26,803.03.

Wall Street relaxed after a report showed prices at the US wholesale level were 4.7 per cent higher last month than a year earlier. While that is more painful than anyone would like, it's not as bad as June's 5.5 per cent inflation rate at the wholesale level, and it was slightly better than economists expected.

If inflation continues to trend that way, the Federal Reserve could decide to hold off on hikes to interest rates. Higher rates would help keep a lid on inflation, but they do so by intentionally slowing the economy and making it more expensive for everyone to borrow money.

“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 increase by the Fed would be the first in more than three years. It also could anger US President Donald Trump, who has been lobbying for lower interest rates.

Oil prices eased, with Brent crude, the international standard, falling 2.1 per cent. Early Friday, Brent was nearly unchanged at USD 87.06 per barrel.

It's been swinging sharply recently, zinging between USD 72 and USD 102 in July as hopes rose and fell that Trump could set a deal with Iran that might allow oil tankers to freely exit the Middle East through the Strait of Hormuz.

A summertime holiday lull has slowed trading, but worries over oil supplies persist.

Clashes between Iran-backed Houthi rebels and government forces in Yemen have raised fears that the country's civil war could reignite and open another front in the Middle East.

In other dealings early Friday, the US dollar fell to 159.32 Japanese yen from 159.50 yen. The euro rose to USD 1.1543 from USD 1.1530.