Global shares fall as caution sets in after Wall St retreat

AP – Global shares were lower yesterday as caution set in after a retreat on Wall Street driven by a decline in technology shares.

France’s CAC 40 fell nearly 0.7 per cent in early trading to 4,770.81. Germany’s DAX dipped 0.5 per cent to 12,585.12. Britain’s FTSE 100 shed 0.7 per cent to 5,857.35. United States (US) shares looked set to drift lower, with Dow futures falling 0.2 per cent to 26,633. S&P 500 futures slipped 0.2 per cent to 3,224.88.

Market players are feeling less optimistic about action from the US Federal Reserve and Congress to help the US economy amid the distractions of the presidential election and the battle over the Supreme Court seat left vacant by the death of Justice Ruth Bader Ginsburg.

Risks of a broader sell-off of technology shares remain after a long due correction, said Hayaki Narita at Mizuho Bank in Singapore.

“Add to that, the growing severity of ‘second wave’ risks in Europe, with the United Kingdom (UK) and France seeing a worrying escalation in new cases,” in addition to flare-ups in the US, Canada and elsewhere, he said.

A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea. PHOTO: AP

Japan’s benchmark Nikkei 225 declined 1.1 per cent to finish at 23,087.82. Australia’s S&P/ASX 200 slipped 0.8 per cent to 5,875.90. South Korea’s Kospi sank 2.6 per cent to 2,272.70. Hong Kong’s Hang Seng dropped 1.8 per cent to 23,311.07, while the Shanghai Composite gave up 1.7 per cent to 3,223.18.

Wall Street experienced more whiplash on Wednesday as stocks closed broadly lower, wiping out gains from the day before.

Apart from worries over the pandemic and politics, Big Tech stocks like Apple and Amazon have been at the centre of recent market swings. They soared on expectations that their growth will only strengthen as the pandemic accelerates work-from-home and other trends favouring digitisation. But they began falling early this month amid fears that they had grown too expensive.

Johnson & Johnson began a huge final study to try to prove if a single dose COVID-19 vaccine can protect against the coronavirus. A handful of other vaccines are already in final-stage studies, and investors increasingly expected one to be available within the first three months of 2021. The hope is that it can help revive the economy and spur strong growth.

Part of this week’s early stumble for stocks was due to worries about European governments imposing tougher restrictions on businesses to slow the spread of the coronavirus, which hurt travel-related companies in particular.

In energy trading, benchmark US crude fell 39 cents to USD39.54 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, lost 41 cents to USD41.36 a barrel.

The US dollar cost JPY105.35, little changed from JPY105.38 late on Wednesday. The euro was trading at USD1.1657, almost unchanged from USD1.1660.