World shares mixed after S&P 500 hits all-time high

Elaine Kurtenbach

BANGKOK (AP) – Shares were lower in Europe yesterday after a mixed session in Asia, where Chinese benchmarks declined after Hong Kong’s leader warned political protests may push the territory into recession.

Germany’s DAX lost 0.1 per cent to 12,924.33 while the CAC 40 in Paris also gave up 0.1 per cent, to 5,723.26. Britain’s FTSE 100 skidded 0.4 per cent to 7,304.97. The future contract for the Dow Jones Industrial Average lost 0.1 per cent to 27,018.00 and that for the S&P 500 declined 1.3 points to 3,035.00.

Shares rallied on Wall Street overnight, with the benchmark S&P 500 hitting a record high, at the onset of a week busy with corporate earnings and economic reports. Investors also are anticipating another interest rate cut by the Federal Reserve.

Investors have been balancing worries over the impact that the costly trade war between the United States (US) and China is having on corporate profits and the global economy against renewed optimism that negotiations that got underway this month could result in some kind of resolution in the conflict.

“A US-China trade deal, even an interim one, remains the critical macroeconomic event for the year,” Jeffrey Halley of Oanda said in a commentary.

“Number two is the trajectory of US interest rates, and here the story is getting murky,” he said.

A currency trader reads documents at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea. PHOTO: AP

In Asia, Japan’s Nikkei 225 index gained 0.5 per cent to 22,974.13, while the S&P ASX/200 edged 0.1 per cent higher to 6,745.40.

The Hang Seng in Hong Kong lost 0.4 per cent to 26,786.76 and the Shanghai Composite index dropped 0.9 per cent to 2,954.18.

Hong Kong’s Chief Executive Carrie Lam said yesterday that the city may fall into recession as it enters its fifth month of protests. Third quarter data are due for release tomorrow and if they show negative growth, then the semiautonomous Chinese territory’s economy will have entered a technical recession.

In other markets, South Korea’s Kospi was almost unchanged at 2,092.69. Shares rose in Taiwan and Singapore but fell in Bangkok and Jakarta. India’s Sensex advanced 1.6 per cent to 39,861.40.

Traders are awaiting releases of several important US economic reports this week, including the Labour Department’s monthly employment report on Friday. Economists expect a slight increase in the unemployment rate to 3.6 per cent in October from 3.5 per cent in September.

The S&P 500 index closed on Monday at 3,039.42, around 14 points above its previous record set on July 26 and up 0.6 per cent for the day. It notched that milestone after weeks of hovering just below its prior high.

Investors have been encouraged as most of the companies that have reported quarterly results the past couple of weeks beat Wall Street analysts’ forecasts for earnings growth.

Despite Monday’s rally, the market could be in for some volatility this week as some 156 companies in the S&P 500 are scheduled to issue their quarterly results this week.

While the market waits for something concrete to emerge from the US-China trade negotiations, investors have been largely playing it safe.

Benchmark crude oil lost 44 cents to USD55.37 a barrel in electronic trading on the New York Mercantile Exchange. It fell 85 cents to settle at USD55.81 a barrel on Monday.

Brent crude oil, the international standard, dropped 38 cents to close at USD60.87 a barrel.

The dollar fell to JPY108.92 from JPY108.96 on Monday. The euro weakened to USD1.1081 from USD1.1100.