Asian stocks mixed, China gains ahead of US price data

Shares were mixed in Asia on Wednesday with Chinese benchmarks pressing higher after a rally in technology companies helped reverse most of an early slide on Wall Street.

Hong Kong’s Hang Seng rose 1.7% to 19,967.25 and the Shanghai Composite index climbed 1.5% to 3,082.50.

That followed the release of data showing inflation at 2.1% in April in annual terms, up 0.4% over the previous quarter.

Surging inflation is prompting central banks and governments in many countries to rein in support provided to markets and businesses during the height of the pandemic.

The moderation of price increases in China raised expectations authorities will opt for more stimulus spending to counter the impact of shutdowns in many major cities to fight coronavirus outbreaks.

“In the context of the inflation landscape elsewhere in the world, China is in a very sweet spot at the moment, markets today are pricing that it gives China’s government room to unleash some juicy stimulus,” Jeffrey Halley of Oanda said in a commentary.

Tokyo’s Nikkei 225 added 0.2% to 26,213.64, while the S&P/ASX 200 edged 0.1% higher to 7,057.40. In Seoul, the Kospi slipped 0.1% to 2,594.43.

Investors are awaiting the release later Wednesday of the Labor Department’s report on consumer prices for April. On Thursday, it will release its report on producer prices, or wholesale prices that impact businesses, for April.

Such data influence the Federal Reserve’s strategy on interest rates and other monetary policy. The concern is that aggressive action to tame inflation might cause the economy to tip into recession.

“Some wait-and-see is largely in place, as participants refrain from taking on excessive risks while awaiting how…