World shares mixed after Asian markets track Wall Street rally

AP – Shares were mixed in early European trading yesterday after a strong day of gains in Asia, while United States (US) futures edged lower.

Benchmarks slipped in London and Frankfurt yesterday but rose in Paris, Tokyo and Hong Kong.

Investors appeared to be shrugging off surging coronavirus caseloads in dozens of countries after the S&P 500 started off August by closing within three per cent of the record high it set in February.

According to the World Health Organization’s (WHO) tally, there were nearly 18 million confirmed coronavirus cases as of yesterday, up from 10.2 million at the beginning of July, as outbreaks expanded or revived in many regions.

Such tallies are thought to vastly understate the number of actual cases due to limits of testing and other issues.

Pedestrians wearing protective face masks pass by the New York Stock Exchange in New York on July 7. Shares advanced across Asia yesterday after Wall Street closed broadly higher on encouraging economic reports, starting off August by closing within three per cent of the record high it set in February. PHOTO: AP

Germany’s DAX lost 0.6 per cent to 12,572.29 while in London, the FTSE 100 edged 0.3 per cent lower to 6,017.13. The CAC 40 in Paris was 0.1 per cent higher at 4,879.84. The future contract for the S&P 500 fell 0.3 per cent while the future for the Dow lost 0.2 per cent.

The continued spread of the coronavirus is raising worries that the economy could backslide again, snuffing out recent budding improvements.

But overnight, the S&P 500 added another 0.7 per cent onto its four-month winning streak, closing within three per cent of the record high it set in February, at 3,294.61.

Microsoft and Apple alone accounted for most of the S&P 500′s gain: Through the pandemic Big Tech has remained almost immune to such concerns on expectations that it can continue to grow.

Apart from the “wall of money” buttressing markets thanks to massive monetary stimulus and government spending, it seems that “investors are already inoculated from the virus while camping under the tech umbrella,” Stephen Innes of AxiCorp said in a commentary.

Tokyo’s Nikkei 225 gained 1.7 per cent to 22,573.66 and the Hang Seng in Hong Kong added two per cent to 24,946.63. Sydney’s S&P ASX 200 jumped 1.9 per cent to 6,037.60 and the Kospi in Seoul picked up 1.3 per cent to 2,279.97. The Shanghai Composite index edged 0.1 per cent higher to 3,371.69.

With the total US caseload rising by less than 50,000 for two straight days, investors are betting that US outbreaks might be moderating, said Jeffrey Halley of Oanda.

“Hopes rose that the US might avoid a deeper recession, which was all financial markets needed to send equity markets higher, and for the US dollar to continue recovering some of its recent losses,” Halley said in a commentary.

Microsoft was down 1.5 per cent in pre-market trading after jumping 5.6 per cent on Monday after it confirmed that it’s in talks to buy the US arm of TikTok, a popular Chinese-owned video app that has drawn the White House’s scrutiny. Microsoft said its CEO, Satya Nadella, has discussed the issue with President Donald Trump, and the tech giant expects the talks with TikTok to end no later than September 15, either with a deal or without.

Apple’s shares also were 1.5 per cent lower ahead of the market open. The company added 2.5 per cent on Monday to its 10.5 per cent rise on Friday following a blowout profit report.

Corporate profits have exceeded analysts’ expectations across the markets. Roughly two-thirds of the way into earnings season, 84 per cent of S&P 500 companies have reported stronger results than expected, according to FactSet.

In other trading, the yield on the 10-year Treasury was steady at 0.55 per cent.

Benchmark US crude lost 48 cents to USD40.53 per barrel in electronic trading on the New York Mercantile Exchange. It rose 1.8 per cent to settle at USD41.01 per barrel on Monday. Brent crude, the international standard, slipped 50 cents to USD43.65. It climbed 1.4 per cent to USD44.15 per barrel on Monday.

The US dollar bought JPY105.92, down from JPY105.96 late Monday. The euro rose to USD1.1788 from USD1.1765.