World stocks higher after Wall St gains on recovery hopes

BEIJING (AP) — World markets followed Wall Street higher yesterday on hopes for a global economic recovery. London and Frankfurt opened higher. Benchmarks in Shanghai, Hong Kong and Seoul rose after early losses. Tokyo retreated after Japan reported its exports sank in May.

Global share prices have regained most of this year’s losses as investors count on a rebound from the coronavirus pandemic despite rising infections in the United States (US), Brazil and some other major countries.

Analysts warn the gains are bigger and faster than justified by the uncertain economic outlook.

Futures for the S&P 500 index and the Dow Jones Industrial Average were up 0.4 per cent after the benchmark S&P 500 index added 1.9 per cent on Tuesday for its third daily gain. That followed data showing US retail spending was stronger than expected.

US retail figures showing an 18 per cent gain over the previous month are encouraging but still USD50 billion below what might have been expected without the coronavirus, said Rob Carnell of ING in a report.

An electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo. PHOTO: AP

“We don’t imagine markets will share this nuanced view.” said Carnell. “They will likely make the most of any good news and continue to be dismissive of any bad news.”

Yesterday in London, the FTSE 100 opened up 0.7 per cent at 6,287.31 and Frankfurt’s DAX added 0.5 per cent to 12,379.94. The CAC 40 in France advanced 0.5 per cent to 4,979.13.

In Asia, the Shanghai Composite Index edged 0.1 per cent higher to 2,935.87 while the Hang Seng in Hong Kong added 0.6 per cent to 24,481.41. The Nikkei 225 in Tokyo shed 0.6 per cent to 22,455.76 after the government reported May exports fell 28.3 per cent from a year earlier in their biggest decline since the 2008 global crisis.

In Seoul, the Kospi closed up 0.1 per cent at 2,141.05. India’s Sensex lost 0.4 per cent to 33,453.82. Sydney’s S&P-ASX 200 gained 0.8 per cent to 5,991.80. New Zealand and Southeast Asia markets advanced.

Also yesterday, Singapore reported May exports fell 25 per cent from a year earlier.

Financial markets have been underpinned by promises from the Fed and other central banks to inject more money into economies through bond purchases and other steps.

However, analysts are skeptical about the US stock market’s run since it began climbing after hitting a bottom in late March, down 34 per cent from its record.

Investors have been pushing up shares of companies that would benefit from a reopening economy.

In energy markets, benchmark US crude oil for July delivery lost 29 cents to USD38.11 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained USD1.26 on Tuesday to settle at USD38.38. Brent crude, the benchmark for international prices, shed 16 cents to USD40.80 per barrel in London. It rose USD1.24 the previous session to USD40.96 a barrel.

The dollar gained to 107.39 yen from Tuesday’s 107.33 yen. The euro declined to USD1.1230 from USD1.1266.