Asian markets were mixed Thursday as rising inflation fears were tempered by a report that teetering Chinese property giant Evergrande had once again avoided a default after meeting bond-payment deadlines.
The dollar soared after a forecast-beating read on the consumer price index which hit a 31 year high last month, which gave fresh pressure on the Federal Reserve to stop inflation running out of control.
The surge - which came a day after a report showing producer prices accelerating - was made up of a spike in the cost of various items, including gasoline, autos and food prices, and led to expectations that the central bank will have to tighten monetary policy quicker than expected.
While Fed officials insist the jump will be temporary as the global economy slowly returns to a semblance of normality next year, observers warned the pain could continue for some time.
The costs of labour are also rising. The inflation picture will get worse before it gets better, according to Sarah House, at Wells Fargo Co. All three main indexes, which started the week posting fresh records, sank into the red for a second successive day.
The payment averted a default again, with two previous deadlines and slightly easing concerns about its imminent collapse. The payments were made only after a 30 day grace period that kicked in when it failed to meet its initial deadlines.
Analysts said the outlook for the firm that isдрowning more than $300 billion of debt, remained uncertain and fears remained about a spillover in the Chinese or even global economy.
Hong Kong edged up, and Evergrande surging more than eight percent, while Shanghai, Tokyo, Wellington and Jakarta were in positive territory.
Despite a lot of concerns about the outlook, market analyst Louis Navellier remained upbeat.
The massive amount of liquidity that has been injected into the capital markets by central banks continues to lift all boats, and stocks continue to have the best fundamental story with solid earnings, a vibrant IPO market and even many solid dividend plays.
The dollar was gaining from Wednesday because of expectations for higher US interest rates next year, while bitcoin was hovering below $64,500, as investors increasingly eye the coin as a hedge against inflation.
In Hong Kong, Alibaba fell nearly two percent as it held a much less subdued single's Day online sales event, with hardly any of the razzmatazz that has marked previous years, with China's ecommerce giants chastened by a government crackdown on platforms.
The day dwarf the pre-Christmas Black Friday promo in the United States, and Alibaba and rival JD.com reported combined sales of more than $100 billion in 2020.
The executives from major platforms were not able to comment on a quieter event this year after Beijing's campaign to rein in Big Tech, but state media have described a quieter event this year.
The euro pound is doWN at 85.57 pence from 85.60 pence.
West Texas Intermediate: up 0.2 percent at $81.46 per barrel
The price of Brent North Sea crude is up 0.2 percent at $82.77 per barrel
New York - Dow: DOWN is 0,7 percent, at 36,079.