A stock-market board in Tokyo.
Photo: franck robichon/ShutterstockU.S. stock futures crept higher, as did some international indexes, while weaker-than-expected inflation data put Chinese shares under pressure.
Japan’s Nikkei 225 index closed up 0.1% on Wednesday, helped by healthcare and electronics stocks. By mid-afternoon in Hong Kong, the city’s Hang Seng Index and stock benchmarks in South Korea and Australia had all risen 0.2% to 0.3%.
E-mini S&P 500 futures added 0.5%, suggesting U.S. markets could gain on Wednesday. The S&P retreated Tuesday, after a recent surge that had briefly returned the equity index to positive territory for the year.
China’s Shanghai Composite dropped 0.6%, after data showed industrial prices falling deeper into deflation in May, declining 3.7% from a year earlier. Consumer inflation eased due to softening food prices, slowing to 2.4%. Both figures undershot consensus forecasts from economists polled by The Wall Street Journal.
Bruce Pang, head of macro strategy research at China Renaissance Securities, said the figures showed that weak demand remained a risk as China’s economy recovered.
“Concerns on unemployment and salary cuts may keep consumers from spending. Small companies and export-oriented companies may continue to see headwinds,” Mr. Pang said.
Dwyfor Evans, head of macro strategy for Asia Pacific at State Street Global Markets, said global economic fundamentals remained weak, and the recovery trajectory uncertain, while a market rebound has made shares expensive relative to earnings.
“This rally is simply not born of economic data, or even recovery prospects. It is really driven by expectations that central banks and governments will be there to back the economic recovery,” Mr. Evans said. “The conversations I had with investors suggested very, very few of them are comfortable with this rally, but when there is a market rallying 5, 10, 15, or 20%, they have to join,” he said.
Investors will pay close attention to the U.S. Federal Reserve’s first economic projections since December, due to be issued on Wednesday, and any indications from the central bank on how deep the U.S. recession would be and how fast a rebound it expects, Mr. Evans said. Fed policy makers will wrap up a two-day meeting on Wednesday.
In bond markets, the yield on the 10-year U.S. Treasury note ticked down to 0.818% from 0.829%. Yields fall as bond prices rise.
Brent crude, the global oil benchmark, shed 1.3% to $40.66 a barrel.
Write to Xie Yu at Yu.Xie@wsj.com
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