Global shares mixed, markets look to central banks, earnings

TOKYO (AP) — Global shares were mixed yesterday, with European indexes rising in early trading, after Asian benchmarks mostly tumbled, as investors looked ahead to central bank meetings and corporate earnings reports.

Market players are monitoring financial reports to see how businesses have managed the fallout from the continued outbreaks of COVID-19. Some technology companies have bucked the trend and are showing positive results. But many companies are hurting.

Investors also are looking ahead to central bank meetings in Britain, Australia, India, Russia and Thailand next week.

France’s CAC 40 added 0.6 per cent in early trading to 4,881.25, while Germany’s DAX gained nearly 0,8 per cent to 12,474.45. Britain’s FTSE 100 jumped 0.6 per cent to 6,026.35. United States (US) shares were set to drift higher with Dow futures at 26,288.0, up 0.3 per cent. S&P 500 futures were at 3,258.62, up 0.3 per cent.

Japan’s benchmark Nikkei 225 dropped 2.8 per cent to finish at 21,710.00, while South Korea’s Kospi slipped 0.8 per cent to 2,249.37. Australia’s S&P/ASX 200 sank 2.0 per cent to 5,927.80. Hong Kong’s Hang Seng dipped 0.5 per cent to 24,595.35, while the Shanghai Composite recouped earlier losses to gain 0.7 per cent, at 3,310.01.

Women carrying Hermes shopping bags use hand sanitiser as they walk on Wall Street in New York. PHOTO: AP

In one positive signal, China reported its manufacturing activity edged up in July and export orders strengthened despite weak US and European demand.

The monthly survey released yesterday was another sign the world’s second-largest economy is gradually recovering from the coronavirus pandemic.

France reported that its economy contracted 13.8 per cent in the April-June quarter, a bit better than expected. Spain’s economy sank 18.5 per cent, it said, by far the sharpest slump since the country’s national statistics agency began collecting data.

Central bank meetings for various countries are on the agenda for the coming week.

“Second quarter GDP for Indonesia and the Philippines will also draw scrutiny, highlighting the impact of the pandemic,” said principal economist for IHS Markit Bernard Aw in Singapore.

The Japanese government said late Thursday the nation’s economy was likely to sink 4.5 per cent for the fiscal year ending in March 2021. It forecasts a return to growth in the following fiscal year.

Also worrying for the world’s third largest economy is how coronavirus cases have been steadily climbing, especially in Tokyo, where daily reported cases have been setting records.

Japan’s unemployment data released yesterday showed a slight improvement in June to 2.8 per cent, down from 2.9 per cent in May.

But analysts said that may be a sign people were leaving the labour market because of the pandemic, and job woes were expected to hover at near-3.0 per cent levels. The Labour Ministry said the number of jobless had increased five months straight, standing at nearly two million people last month.

Among the Japanese companies reporting earnings next week are Sony Corp, Honda Motor Co, Toyota Motor Corp and Nintendo Co.

Some companies are holding up better than others.

Japanese media reports said Toyota was on course to become the No 1 automaker in the world again, overtaking Volkswagen, now the top manufacturer in global vehicle sales.

Toyota’s sales were already recovering in markets like China, which is recovering from its early outbreaks of COVID-19, according to the company.

Overnight, the US reported the economy contracted at a record-shattering 32.9 per cent annual rate in April-June as pandemic shutdowns expanded.

News of the deep, steep collapse came as a resurgence of outbreaks has pushed businesses in many areas to close for a second time. The government’s estimate of the second-quarter fall in the gross domestic product has no comparison since records began in 1947. The previous worst quarterly contraction — at 10 per cent, less than a third of what was reported on Thursday — occurred in 1958 during the Eisenhower administration.

Benchmark US crude gained 25 cents to USD40.17 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 26 cents to USD43.20 a barrel.

The dollar slipped to JPY104.62 from JPY104.73. The euro cost USD1.1866, up from USD1.1846.