Markets mixed after US inflation data, China figures give boost

Asian markets were mixed while gold hit a record high Monday after data showed a slight uptick in US inflation that Federal Reserve boss Jerome Powell said was "in line with expectations."

Traders were also cheered by a big jump in Chinese factory activity that fueled hopes the world's number two economy may be on its way back after bottoming out.

Major US indices began the week on a muted note, with the Dow lower and the Nasdaq rising as markets look ahead to key labor data later in the week. Both the Dow and S&P 500 finished the first quarter at records.

Long-awaited figures on the personal consumption expenditures (PCE) index -- the Fed's preferred gauge of inflation -- showed a small on-year rise in March compared with February, though the core reading eased slightly.

Powell said the report "is pretty much in line with our expectations" and decision-makers were on track to hit their long-term inflation target of two percent.

He said that while the recent inflation data was higher than the Fed would have liked, the February figures were "definitely more along the lines of what we want to see".

The data appeared to have little impact on traders' expectations for a June interest rate cut but Powell warned they were unlikely to fall to the levels seen after the 2008 global financial crisis.

Friday's news followed a surprise upward revision Thursday to fourth-quarter US economic growth that some observers said could complicate the Fed's plans to cut borrowing costs.

In Asian trade, Seoul, Singapore and Manila rose, while there were losses in Taipei and Jakarta.

Hong Kong, Sydney, Wellington, London, Paris and Frankfurt were closed for Easter.

Gold hit a record high of $2,265.73, according to Bloomberg News, extending the year's rally fueled by US central bank hints at an easing of credit conditions.

It is also being supported by its attraction as a safe haven in times of turmoil, with geopolitical tensions growing.

Shanghai jumped around one percent as traders welcomed news that China's manufacturing grew for the first time in half a year, giving a boost to leaders as they battle to kickstart the struggling economy.

The 50.8 reading in March was the first showing expansion since September and was well above forecasts.

"The industrial sector seems to be resilient, partly helped by strong exports," said Zhang Zhiwei at Pinpoint Asset Management.

"If fiscal spending rises and exports remain strong, the economic momentum may improve."

But Tokyo sank more than one percent as the Bank of Japan's closely watched Tankan survey showed that confidence among Japan's largest manufacturers slipped in the first quarter, having risen for three straight quarters.

 Key figures around 1400 GMT 

 New York - Dow: DOWN 0.4 percent at 39,638.82

New York - S&P 500 - UP less than 0.1 percent at 5,256.21

New York - Nasdaq - UP 0.5 percent at 16,452.45

Tokyo - Nikkei 225: DOWN 1.4 percent at 39,803.09 (close)

Shanghai - Composite: UP 1.2 percent at 3,077.38 (close)

Hong Kong - Hang Seng Index: Closed for holiday

London - FTSE 100: Closed for a holiday

Dollar/yen: UP at 151.72 yen from 151.39 yen on Thursday

Euro/dollar: DOWN at $1.0750 from $1.0789

Pound/dollar: DOWN at $1.2578 from $1.2619

Euro/pound: DOWN at 85.46 pence from 85.47 pence

West Texas Intermediate: UP 0.1 percent at $83.21 per barrel

Brent North Sea Crude: DOWN 0.1 percent at $86.62 per barrel

New York - Dow: UP 0.1 percent at 39,807.37 points (close)