World shares mixed as investors eye virus counts, stimulus

UNITED STATES (AP) – Shares were mixed in Europe and Asia yesterday, after buying of technology stocks nudged the S&P 500 closer to the record high it set in February before the pandemic crunched the global economy.

Britain’s FTSE 100 slipped 0.1 per cent to 6,122.05, while the DAX in Frankfurt lost 0.2 per cent to 12,892.19. In Paris, the CAC 40 lost 0.3 per cent to 4,957.26. The future for the S&P 500 edged 0.1 per cent lower, to 3,376.30. The future for the Dow industrials lost 0.2 per cent to 27,734.00.

Markets were buoyed by developments in Washington, after Speaker Nancy Pelosi called the House back into session, cutting short the lawmakers’ summer recess for a vote expected on Saturday on legislation to prohibit changes in the United States (US) Postal Service amid growing concerns that the Trump administration is trying to undermine the agency ahead of the November election.

The proposed package will also include USD25 billion to shore up the Postal Service, which is suffering losses. But prospects for additional economic aid for American workers and businesses remain uncertain after talks on a fresh stimulus package stalled.

Investors said it’s crucial that the support comes, particularly after USD600 in weekly unemployment benefits and other stimulus from the US government expired.

Without more help for the US economy, analysts said the recovery that investors have been assuming is on the way won’t materialise. And that assumption is a huge reason the stock market is as high as it is.

Still, on Monday the S&P 500 picked up 0.3 per cent to 3,381.99. Earlier in the day, it briefly crossed above its record closing level of 3,386.15, which was set on February 19 before the pandemic shut down businesses worldwide and created the worst recession in decades.

A woman wearing a face mask walks past a bank’s electronic board showing the Hong Kong share index at Hong Kong Stock Exchange. PHOTO: AP

“The markets are in ‘show me the money’ mode, perhaps erring on the side of caution, not holding their breath for an imminent deal in Congress,” Stephen Innes of AxiCorp said in a commentary. “Sadly, this leaves the US real economy waddling and many businesses and millions of consumers getting the short shrift.”

In Asia, South Korea’s Kospi led regional losses, slumping 2.5 per cent to 2,348.24 amid worries over surging coronavirus cases.

South Korean health officials said yesterday they had found 457 coronavirus cases linked to a huge northern Seoul church led by a bitter critic of the country’s president, driving an alarming rise in infections in the greater capital area.

During a virus briefing, Kwon Jun-wook, director of South Korea’s National Health Institute, said the outbreaks could create a situation comparable to the “miserable scenes of the United States or European countries”.

There’s concern that the virus’ spread could worsen after thousand of protesters, including members of the church and its ultra-right pastor, Jun Kwang-hun, marched in downtown Seoul on Saturday despite official pleas to stay home.

Elsewhere, Hong Kong’s Hang Seng index lost 0.2 per cent to 25,367.38. Japan’s Nikkei 225 slipped 0.2 per cent to 23,051.08. Australia’s S&P/ASX 200 gained 0.8 per cent to 6,123.40, while the Shanghai Composite index edged 0.4 per cent higher, to 3,451.09.

Treasury yields moderated a bit, following a big rally for the 10-year yield last week. It dipped to 0.67 per cent from 0.71 per cent late Friday.

It had zoomed upward from 0.56 per cent through last week.

Higher yields suggest investors are upgrading their expectations for inflation and the economy. But they can also pull some buyers away from stocks into bonds, hurting stock prices.

Benchmark US crude oil was flat at USD42.89 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, picked up six cents to USD45.43.

In currency dealings, the US dollar weakened to JPY105.58 Japanese from JPY105.98. The euro rose to EUR1.1890 from EUR1.1873.

Gold for delivery in December climbed USD17.60 cents to USD2,016.30 per ounce.