US tech stocks head lower as traders await Fed minutes

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European stocks rose in morning trade on Wednesday, rebounding after hitting five-week lows in the previous session, as investors shrugged off further evidence of weakness in the Chinese economy.

Europe’s region-wide Stoxx Europe 600 rose 0.2 per cent, led by consumer cyclical stocks. France’s Cac 40 was up 0.4 per cent and Germany’s Dax added 0.2 per cent. 

Markets in Asia were overshadowed by another gloomy datapoint from China, which signalled that new home prices declined 2.5 per cent month on month in July, following a 2.2 per cent fall in the previous month.

Hong Kong’s Hang Seng index fell 1.4 per cent and China’s benchmark CSI 300 dropped 0.7 per cent, while South Korea’s Kospi shed 1.5 per cent and Japan’s Topix lost 1.3 per cent.

China’s once dominant property sector has battled with flagging demand as the economy struggled to rebound after three years of severe pandemic restrictions, driving large property developers into a debt crisis.

Declines in the property sector come at a time of heightened anxiety over China’s economic recovery, after a string of data releases in preceding weeks signalled the country was slipping into deflation, while its consumer and business activity fizzled.

In an unexpected policy move a day earlier, the People’s Bank of China lowered its one-year, medium-term lending facility rate, which affects loans to financial institutions, in an effort to shore up growth.

Meanwhile, sterling edged 0.3 per cent higher against the dollar, trading at $1.2739, after fresh data showed that the annual rate of UK inflation fell to 6.8 per cent in July, marking a significant drop from 7.9 per cent in June. 

While UK inflation was still higher than elsewhere in Europe, the headline figure declined more than economists had expected, boosting hopes that the Bank of England could soon ease its aggressive monetary tightening campaign. 

In the US, futures contracts tracking the benchmark S&P 500 and those tracking the tech-focused Nasdaq 100 added 0.1 per cent ahead of the New York opening bell. 

Wall Street stocks hit a five-week low in the previous session, after stronger than expected data on US retail purchases raised concerns over persistent price pressures, boosting bets that the Federal Reserve would keep interest rates higher for longer. 

Investor attention turned to the minutes from the Fed’s latest policy meeting, coming out later in the day, in the hope of gaining some insight into the central bank’s future rate decisions.

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