World shares mixed, futures advance after Wall Street retreat

AP – World shares were mixed yesterday, with European benchmarks and United States (US) futures mostly higher despite an overnight retreat on Wall Street.

Stocks rose yesterday in London, Paris and Tokyo but fell in Frankfurt and Shanghai.

The United Kingdom (UK) economy officially fell into recession after official figures showed it contracting by a record 20.4 per cent in the second quarter as a result of lockdown measures put in place to counter the pandemic.

The quarterly update was the worst since records began in 1955, the Office for National
Statistics said.

Still, Britain’s FTSE 100 gained 0.7 per cent to 6,196.71, while the CAC 40 in Paris edged 0.3 per cent higher, to 5,042.72.

Germany’s DAX slipped 0.1 per cent to 12,939.74.

Concerns over fresh waves of new coronavirus infections are gaining traction with a resurgence of cases in Germany and other European countries.

Germany has been lauded for keeping the pandemic under control for a long time, but the easing of measures and the return of travellers have in recent weeks lead to an uptick of infections.

A man photographs an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo. PHOTO: AP

Germany’s Robert Koch-Institute, which tracks the coronavirus, registered 1,226 new infections yesterday. That is the highest number since early May.

US futures advanced despite a late slide in big technology companies on Tuesday that left indexes broadly lower, breaking a seven-day winning streak for the S&P 500.

The future for the S&P 500 gained 0.7 per cent to 3,351.70 while the contract for the Dow Industrials jumped 0.9 per cent to 27,865.00.

In Asian trading, Tokyo’s Nikkei 225 gained 0.4 per cent to 22,843.96, while Hong Kong’s Hang Seng rebounded from early losses, surging 1.4 per cent to 24,228.10. In South Korea, the Kospi gained 0.6 per cent in a late comeback, closing at 2,432.35. The Shanghai Composite index lost 0.6 per cent to 3,319.27. Australia’s S&P/ASX 200 declined 0.1 per cent to 6,132.00.

A discouraging lack of progress on talks between Congress and the White House over more economic aid for the US economy dogged trading this week, analysts said.

“When you walk back the market’s expectations of an imminent fiscal deal, it is like poking the balloon with a straight pin as all semblance of near-term optimism gets immediately deflated,” Stephen Innes of AxiCorp said in a commentary.

Overnight’s reversal left the S&P 500 with a 0.8 per cent loss, ending its seven-day winning streak but leaving the benchmark within two per cent of the all-time high it set
in February.

The stunning turnaround from a nearly 34 per cent tumble in March, when the coronavirus pandemic sent stocks into a nosedive, shows investors gaining confidence from improved economic data and better-than-expected second-quarter corporate results.

Stocks are attractive compared with other assets thanks partly to unprecedented actions by the Federal Reserve and other central banks to stabilise markets by cutting interest rates and ramping up bond purchases.

Hopes are rising that the many pharmaceutical companies working on ways to treat COVID-19 will deliver a working vaccine in the coming months.

The yield on the 10-year Treasury rose to 0.65 per cent from 0.57 per cent late Monday, a big move.

The price of gold, which recently surpassed USD2,000 per ounce for the first time, bounced back after dropping nearly USD60 earlier in the day. It gained USD3.30 to USD1,949.60 per ounce.

Benchmark US crude oil for September delivery gained 42 cents to USD42.03 per barrel in electronic trading on the New York Mercantile Exchange. It fell 0.8 per cent to settle at USD41.61 per barrel on Tuesday. Brent crude oil for October delivery picked up 45 cents to USD44.95 per barrel.

In currency dealings, the US dollar bought JPY106.82, up from JPY106.51.

The euro weakened to USD1.1743 from USD1.1744.