SINGAPORE: World stocks were mostly down Thursday amid concerns that rising food and fuel costs could undermine consumer demand, hurting economic growth and company profits. Oil prices hovered above $108 a barrel in Asia as a large drop in US gasoline supplies suggested the two-month crude rally hasn't yet undermined consumer demand. Crude has risen about 27 percent since mid-February. In currencies, the dollar was lower against the yen and the euro. Benchmark crude for May delivery was down 4 cents at $107.07 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained 86 cents to settle at $107.11 on Wednesday. In London, Brent crude for May delivery was down 2 cents to $122.86 a barrel on the ICE Futures exchange. Traders are mulling whether global crude demand is strong enough to justify extending a 27 percent surge in prices since mid-February. Oil touched $113.46 in intraday trading Monday, the highest since September 2008. On Wednesday, the Energy Information Administration reported US gasoline supplies fell by 7 million barrels last week, a bigger drop than the 1.3 million barrels forecast by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos. “As gasoline stocks plunged, a major dent was placed in the argument that high prices are beginning to deter demand,” Ritterbusch and Associates said in a report. The EIA also said crude supplies rose by 1.6 million barrels last week to 359.3 million barrels, which is 1.5 percent above year-ago levels. In other Nymex trading in May contracts, heating oil dropped 0.3 cents to $3.21 a gallon and gasoline rose 0.2 cents to $3.24 a gallon. Natural gas futures were down 0.3 cents at $4.12 per 1,000 cubic feet. European shares were down in early trading. Britain's FTSE 100 drooped 0.5 percent, Germany's DAX slipped 0.2 percent to 7,162.90 and France's CAC-40 was 0.5 percent down to 3,984.94. Wall Street was headed for a lower opening, too, with Dow Jones industrial futures down 12 points to 12,187 and S and amp;P 500 futures lower by 2 points to 1,306.70. Asian shares fared only slightly better. Tokyo's Nikkei 225 was up 0.1 percent to close at 9,653.92, and South Korea's Kospi was 0.9 percent higher to 2,141.06. Hong Kong's Hang Seng index was down 0.5 percent to 24,014. Asian investors were eyeing mixed signals on US economic growth. While the unemployment rate has dropped this year as the economy creates more jobs, exports in February were weaker than expected. “While softness in US growth is a concern, the real issue for investors is the second-round effects of high and rising commodity prices,” said Clive McDonnell of BNP Paribas in Singapore. “For Asia in particular, margins in the consumer sectors are at risk as we pass the sweet spot of rising commodity and equity prices.” China's benchmark Shanghai Composite Index was 0.3 percent lower at 3,042.64 as banking and real estate stocks led the way down amid concerns that inflation data due out Friday might prompt Beijing to hike interest rates or further tighten credit curbs. Shanghai-listed property developer Poly Real Estate Group Co. Ltd. slid 2.3 percent. Hong Kong-listed China Resources Land Ltd. was 0.3 percent down. Industrial and amp; Commercial Bank of China Ltd., the country's biggest commercial lender, lost 1.2 percent. Analysts expect March inflation to rise slightly from February's 4.9 percent, already well above the government's official target. First quarter growth also due to be reported Friday is expected to ease from the previous quarter's 9.8 percent. Singapore's Straits Times index slumped 0.4 percent to 3,160 after the central bank said Thursday it would allow the currency to strengthen in a bid to slow inflation. Singapore also reported that the economy grew a seasonally adjusted annualized 24 percent in the first quarter. Elsewhere in Asia, Sydney's S and amp;P ASX 200 was down 0.6 percent at 4,884.20. “Generally, the market feels as if it is struggling for direction. Commodities seem to have stabilized since the beginning of the week but we aren't seeing huge amounts of buying. I think a lot of investors are a bit cautious given the recent gains and lackluster start to the US earnings season,” Ben Potter, market strategist at IG Markets in Melbourne, said in a report. On Wall Street, US stocks ended slightly up Wednesday. The Standard and amp; Poor's 500 index rose 0.25 point, or less than 0.1 percent, to 1,314.41. The Dow Jones industrial average rose 7.41, or 0.1 percent, to 12,270.99. The Nasdaq composite gained 16.73, or 0.6 percent, to 2,761.52.
