Global stocks mixed after Wall St slips on economy worries

BEIJING (AP) – European stock markets opened higher yesterday while Asian prices followed Wall Street lower on worries economic recoveries might fade as coronavirus cases increase in the United States (US) and some other countries.

London and Frankfurt gained in early trading and US stock futures were lower. Shanghai, Tokyo, Hong Kong and Southeast Asia retreated a day after strong gains driven by the rise of US tech stocks.

Global stock prices have recovered most of this year’s losses on optimism about a recovery from the coronavirus pandemic. But forecasters warn the rise might be too big and too fast to be supported by uncertain economic conditions.

“Stock markets just appear to be going through a consolidation phase in the run up to earnings season,” said Craig Erlam of OANDA in a report.

In early trading, the FTSE 100 in London gained 0.4 per cent to 6,074.43 and Frankfurt’s DAX gained 0.4 per cent to 12,544.91.

United States flags decorate the New York Stock Exchange in New York. PHOTO: AP

The CAC 40 in France added 0.3 per cent to 4,936.88. On Wall Street, the future for the benchmark S&P 500 index rose 0.3 per cent. That for the Dow Jones Industrial Average was 0.4 per cent higher.

On Thursday, the S&P 500 index lost 0.6 per cent. The Dow dropped 1.4 per cent.

In Asia, the Shanghai Composite Index lost 1.9 per cent to 3,383.32 and the Nikkei 225 in Tokyo shed 1.1 per cent to 22,290.81. The Hang Seng in Hong Kong retreated 1.8 per cent to 25,727.41.

The Kospi in Seoul lost 0.8 per cent to 2,140.25 and Sydney’s S&P-ASX 200 declined 0.6 per cent at 5,919.20. India’s Sensex lost 0.3 per cent to 36,625.60. New Zealand, Jakarta and Bangkok retreated, while Singapore markets were closed.

On Thursday, three out of four stocks in the S&P declined. The biggest losers were oil companies, airlines and other stocks that are most heavily affected by a reopening and strengthening economy.

The Nasdaq composite, dominated by tech stocks that are seen as relatively resilient to the pandemic, added 0.5 per cent to a record high.

“The market is concerned about the uptick in cases globally,” said Stephen Innes of AxiCorp. in a report. “Money is funneling into perceived safe areas of the market like tech, which should hold up broader indexes to a degree.”

US government data showed 1.3 million workers filed for unemployment claims last week. That is down from 1.4 million the prior week and a peak of nearly 6.9 million in late March.

The improvements have helped validate investors’ optimism that the economy can recover as anti-virus controls are relaxed. That helped the S&P 500 rebound to within seven per cent of its record, after being down nearly 34 per cent.

But economists point to a troubling slowdown in the pace of such changes, including moderating declines in the four-week average of jobless claims.