World shares slip as global rally loses steam

BANGKOK (AP) — World shares were mostly lower and United States (US) futures slipped yesterday as worries over fresh outbreaks of coronavirus infections in the US and elsewhere gnawed at hopes for a fast recovery from pandemic shutdowns.

European benchmarks lost ground, with Germany’s DAX down less than 0.1 per cent at 12,378.96 while the CAC 40 in Paris gave up 0.4 per cent to 4,975.46. Britain’s FTSE 100 lost 0.3 per cent to 6,233.35.

US futures augured further losses, with the contracts for the S&P 500 future and the Dow industrials both down 0.2 per cent.

After weeks of trending upward, shares have retreated as rising numbers of cases in many places around the world have raise concern that even if governments do not reimpose restrictions to curb coronavirus outbreaks businesses and consumers might refrain from spending much.

“Many countries are far better prepared for a second wave, which could spare them drastic measures such as a complete lockdown,” said a market analyst at AxiCorp Milan Cutkovic. “However, even a partial lockdown could have a catastrophic effect on the struggling economies of many countries across the globe,” he said.

Women walk past an electronic stock board showing Japan’s Nikkei 225 and New York Dow indexes at a securities firm in Tokyo. PHOTO: AP

Given these realities, investors are recognising that volatility may be the markets’ only certainty in coming months.

In Asian trading, Japan’s Nikkei 225 shed 0.5 per cent to 22,355.46 and the Hang Seng in Hong Kong edged 0.1 per cent lower, to 24,355.46. South Korea’s Kospi slipped 0.4 per cent to 2,133.48.

The Shanghai Composite index gained 0.1 per cent to 2,939.32 after the central bank reportedly conducted market operations to inject cash ahead of mid-year settlements.

India’s Sensex jumped 1.2 per cent and shares also rose in Taiwan but fell in Southeast Asia.

Sydney’s S&P/ASX 200 tumbled 0.9 per cent to 5,936.50 after the government reported worse-than-expected unemployment figures.

Some 228,000 jobs were lost for a total of 835,000 jobs lost in two months’ time, officials said.

“These are devastating unemployment numbers, they reveal the true pain and hurt that Australians are going through as a result of the coronavirus,” said the Australian Treasurer Josh Frydenberg.

“These are not just numbers. These are our friends, family members, workmates and neighbours,” he said.

The jobless data just added to the gloom, said Jeffrey Halley of Oanda. Eratic moves by North Korea and antagonisms between China and India in Kashmir have added to the unease.

“Covid-19 fears in Beijing and parts of the United States and geopolitical concerns in Asia continue to weigh on sentiment,” he said.

Chinese e-commerce firm JD.com’s stock jumped nearly six per cent on its debut in Hong Kong yesterday after the firm raised USD3.9 billion in a share sale. But it ended trading down 3.5 per cent.

JD.com is already listed on Nasdaq in New York.

Overnight, the S&P 500 dipped 0.4 per cent to break a three-day winning streak, closing at 3,113.49. The Dow Jones Industrial Average lost 0.6 per cent to 26,119.61, while the Nasdaq composite edged 0.1 per cent higher, to 9,910.53.

Stocks of smaller companies fared worse, as is typical when investors are apprehensive about the economy. The Russell 2000 index of small-cap stocks fell 1.8 per cent.

The yield on the 10-year Treasury was steady at 0.72 per cent. It tends to move with investors’ expectations for the economy and inflation.

A barrel of US crude oil for delivery in July slipped two cents to USD37.94 per barrel in electronic trading on the New York Mercantile Exchange. It gave up 42 cents to settle at USD37.96 on Wednesday. Brent crude, the international standard, picked up 13 cents to USD40.84 per barrel.

In currency trading, the dollar bought JPY107.05, up from 106.97 yen yesterday. The euro slipped to USD1.1234 from USD1.1243.