Global shares mostly higher after Wall Street rebound

AP – World stocks were mostly higher yesterday as European shares advanced despite fresh data showing the regional economic recovery may be faltering.

Surveys of purchasing managers by IHS Markit indicated business activity slowed in the region using the euro. Signs of strength in manufacturing were countered by weakness in the service sector, especially in places where coronavirus outbreaks are flaring, the report said.

The preliminary or “flash” composite purchasing managers index for the eurozone was at a three-month low of 50.1 in September on a scale of one to 100 where 50 marks the break between expansion and contraction. However, the flash manufacturing PMI was at 53.7, a 25-month high, it said.

Britain’s FTSE 100 gained two per cent to 5,948.48, while the DAX in Germany added 1.5 per cent to 12,780.41. In Paris, the CAC 40 advanced 1.6 per cent to 4,851.10. United States (US) futures also augured gains for Wall Street.

The future contract for the S&P 500 was up 0.3 per cent while the future for the Dow Industrials added 0.6 per cent.

Investors are keeping a wary eye on how the coronavirus pandemic is affecting the economic outlook in the US as well after the Federal Reserve chairman urged Congress to provide fresh stimulus for the US economy.

At a House of Representatives committee hearing on Tuesday, Powell said the economy appears to be improving, but some areas appear to be slowing after the expiration of extra weekly unemployment benefits and other stimulus that Congress approved in March.

“In fact, even as Fed Powell has sounded caution about the strength and steadiness of a recovery — contingent on ‘keeping the virus under control’ — the wider Fed positioning is not one of unbridled pipeline stimulus.

And this may limit follow-through rallies in asset markets,” Mizuho Bank said in a commentary. Tokyo’s Nikkei 225 trimmed early losses, closing 0.1 per cent lower at 23,346.49 after trading resumed following a four-day weekend.

The Hang Seng in Hong Kong edged 0.1 per cent higher to 23,742.51. South Korea’s Kospi was almost unchanged at 2,333.24.

India’s Sensex gave up early gains to drop 0.8 per cent, to 37,428.46, while the Shanghai Composite index added 0.2 per cent to 3,279.71.