Markets React to U.S. Inflation Data

Alibaba Group has revealed that a new service charge will be implemented in September, which the company anticipates will enhance its financial performance. During a recent Q&A session, the company highlighted a shareholder vote scheduled for this month to designate Hong Kong as a primary listing venue alongside New York. This move would facilitate participation in the Southbound Stock Connect program. Despite competitive pressures impacting net income and earnings per share, Alibaba reported strong year-over-year growth in gross merchandise value during its June 18 sales event, with its premium buyer program, 88VIP, surpassing 42 million members. In contrast, Tencent's unsponsored American Depositary Receipts (ADRs) experienced a decline of 3.35% in U.S. trading, despite better-than-expected financial results. The company’s primary listing remains in Hong Kong, where it also saw a 1.44% drop. Tencent's President Martin Lau noted that while the second quarter showed a slowdown in consumer sentiment, government policies aimed at boosting confidence could eventually lead to economic recovery. Asian markets showed a positive trend following updates on U.S. inflation and Japan's economic growth, with the Nikkei 225 rising 0.8%. Japan's GDP grew at an annual rate of 3.1% in the April-June period, indicating a rebound from previous contractions. Meanwhile, the U.S. stock market also saw gains, with the S&P 500 rising 0.4% as investors reacted to inflation data that aligned with expectations, suggesting potential interest rate cuts by the Federal Reserve in September. In the UK, the FTSE 100 gained 0.56% as housebuilders benefitted from new inflation data, raising hopes for interest rate reductions. Flutter Entertainment and Aviva reported strong financial performances, contributing to a positive market sentiment.