Traders are concerned about the impact of US midterm election results on inflation

London (AFP) - Stock markets mostly fell Thursday looking ahead to key inflation data in the United States and as traders digested the country’s inconclusive midterm election results as well as a cryptocurrency crisis.

US inflation numbers due Thursday will help markets to gauge the speed of future rate hikes by the Federal Reserve. The dollar was mixed before the latest data.

“US growth looks still too strong to bring inflation down,” noted Tapas Strickland of National Australia Bank.

“The ongoing resilience in the (consumer prices) data and stickiness in inflation continue to point to the Fed hiking rates closer to 5.0 percent or higher.”

Rates currently stand at between 3.75 to 4.0 percent.

In US midterm elections, Republicans appeared likely to win a majority in the House of Representatives, but with a much smaller victory than they had hoped for – and that pollsters forecast.

Markets are grappling also with the impact of strict zero-Covid measures in China, with supply chains and activity slowed by harsh lockdowns and testing policies.

“China’s domestic demand is weak and their key trading partners are entering recession territory,” said Edward Moya at OANDA trading group.

Oil prices fell Thursday, extending recent losses on weaker Chinese demand.

The crypto world has meanwhile been rocked by a surprise decision from Binance, the world’s biggest cryptocurrency platform, to scrap a possible acquisition of rival a day after disclosing it had signed a non-binding letter of intent to buy it.

The near-collapse of FTX has plunged bitcoin to a two-year low.

“FTX’s slump from over a $32 billion valuation to zero in less than a few days raises numerous issues,” said Stephen Innes at SPI Asset Management.

“Prominent investors are wearing eggs on their faces after diving in head first.”

He added that gold and silver would be the biggest beneficiaries of the crypto fallout with investors looking to the trusted precious metals for stability.

- Key figures around 1200 GMT -

London - FTSE 100: DOWN 0.1 percent at 7,291.54 points

Frankfurt - DAX: FLAT at 13,667.53

Paris - CAC 40: DOWN 0.5 percent at 6,401.60

EURO STOXX 50: DOWN 0.1 percent at 3,725.10

Tokyo - Nikkei 225: DOWN 1.0 percent at 27,446.10 (close)

Hong Kong - Hang Seng Index: DOWN 1.7 percent at 16,081.04 (close)

Shanghai - Composite: DOWN 0.4 percent at 3,036.13 (close)

New York - Dow: DOWN 2.0 percent at 32,513.94 (close)

Euro/dollar: DOWN at $0.9945 from $1.0017 Wednesday

Pound/dollar: UP at $1.1376 from $1.1352

Dollar/yen: UP at 146.49 yen from 146.37 yen

Euro/pound: DOWN at 87.42 pence from 88.19 pence

West Texas Intermediate: DOWN 0.6 percent at $85.33 per barrel

Brent North Sea crude: DOWN 0.4 percent at $92.29 per barrel