Global shares mixed as pandemic uncertainty squelches buying

TOKYO (AP) – Global shares were mixed yesterday as uncertainty over the coronavirus pandemic sapped the buying enthusiasm that has been driving prices higher.

France’s CAC 40 slipped 0.6 per cent in early trading to 5,015.65, while Germany’s DAX was down 0.3 per cent at 12,581.38. Britain’s FTSE 100 edged up nearly 0.2 per cent to 6,200.27. United States (US) shares were set to drift higher with Dow futures up 0.3 per cent at 25,856.0. The S&P 500 future contract gained 0.3 per cent to 3,146.12.

Given the current murky outlook, investors are likely to cash in on recent gains, analysts said.

“Investors are trying their best to look through the knotty COVID-19 economic entanglement. Still, you can see why they might be more prone to booking some profits on upticks,” Chief Market Strategist at AxiCorp Stephen Innes said in a report.

But the recent bullish mood remains on shaky ground, and could easily sour, he said.

“It is impossible for investors not to grow weary and eventually, at some point, fall prey to the endless drip of negative COVID-19 stories and how the second wave virus will crush the market,” he added.

Currency traders at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea. PHOTO: AP

Japan’s benchmark Nikkei 225 dropped 0.8 per cent to finish at 22,438.65. Australia’s S&P/ASX 200 dipped 1.5 per cent to 5,920.30. South Korea’s Kospi shed 0.2 per cent to 2,158.88. Hong Kong’s Hang Seng rose 0.6 per cent after fluctuating during much of the day to 26,129.18, while the Shanghai Composite bounced higher, adding 1.7 per cent to 3,403.44.

Although some Asian benchmarks fell, trading overall was relatively calm, said Senior Market Economist at Oanda Jeffrey Halley. Much of the regional concern is focussed on the rising cases in the US as Asia needs a recovery there to attain growth, he said.

“Unfortunately, when America catches a cold, the world catches the flu; that maxim has not changed. It does have the potential to delay and depress the world’s nascent recovery,” said Halley.

Optimism that the US economy is on the mend as businesses reopen has helped drive stocks higher. But the recent surge in new coronavirus cases has clouded hopes for a relatively quick economic turnaround. Investors are also girding for what the next few weeks will reveal about the health of corporate America as companies begin reporting their second-quarter results.

“It’s not unusual for these five-day runs to be met with a bout of profit-taking, especially given the headlines on the virus,” said Chief Market Strategist at Prudential Financial Quincy Krosby. “When you move toward overbought conditions it doesn’t take much for the market to burn off some of the froth.”

Unprecedented amounts of aid from central banks and governments around the world are helping to prop up markets. But the worsening infection levels across much of the US are countering that support.

Benchmark US crude lost 17 cents to USD40.45 a barrel in electronic trading on the New York Mercantile Exchange. It slipped a penny to settle at USD40.62 per barrel on Tuesday. Brent crude, the international standard, fell five cents to USD43.03 per barrel.

The dollar inched down to JPY107.50 from JPY107.53 on Tuesday. The euro rose to USD1.1287 from USD1.1274.