Global stocks mixed after Wall St rally ahead of US debate

AP – Global stocks were mixed yesterday after Wall Street rallied as investors looked ahead to a debate between United States (US) President Donald Trump and his challenger in the November election, Joe Biden.

London and Frankfurt opened lower while Shanghai and Tokyo advanced. US stock futures were lower a day after Wall Street’s benchmark S&P 500 index gained 1.6 per cent, boosted by announcements of corporate acquisitions and gains by big tech stocks.

“This is welcome cheer, but does not redeem equities from a negative September,” said Mizuho Bank in a report. With no obvious catalyst, its analysts questioned whether the rise was driven by little more than “month-end short-covering,” or traders buying stocks to fulfill commitments to re-sell them.

In early trading, the FTSE 100 in London lost 0.9 per cent to 5,876.80 and Frankfurt’s DAX shed 0.7 per cent to 12,786.27. The CAC 40 in Paris retreated 0.5 per cent to 4,820.42. On Wall Street, the S&P 500 future was down 0.1 per cent and that for the Dow Jones Industrial Average was off 0.2 per cent.

On Monday, 90 per cent of stocks in the S&P 500 rose. The index is on track to close out September with a loss of 4.2 per cent after five months of gains. Amazon climbed 2.5 per cent, Apple rose 2.4 per cent and Microsoft gained 0.8 per cent.

The Dow Jones Industrial Average gained 1.5 per cent. The Nasdaq composite climbed 1.9 per cent.

Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea yesterday. PHOTO: AP

Investors awaited the 90-minute televised Trump-Biden debate. It comes amid trade tension with China and rising coronavirus deaths. Tens of millions of Americans are out of work.

Markets are watching the November election’s impact on tax policy and how long it might take to determine the winner.

The debate outcome is “not necessarily all that market relevant,” said Robert Carnell of ING in a report.

“With a reasonable polling lead, one could argue that Joe Biden has more to lose here than President Trump,” said Carnell. He said with some potential for gaffes or other colourful moments, the debate might be “cringe-worthy but unlikely to deliver an electoral car-crash for either side.”

In Asia, the Shanghai Composite Index gained 0.2 per cent to 3,224.36 while the Hang Seng in Hong Kong retreated 0.8 per cent to 23,275.53. The Nikkei 225 in Tokyo edged 0.1 per cent higher to 23,539.10. The Kospi in Seoul advanced 0.9 per cent to 2,327.89 while Sydney’s S&P-ASX 200 was unchanged at 5,952.10.

India’s Sensex gained 0.5 per cent to 38,167.66. New Zealand and Southeast Asian markets declined.

Tech stocks led an earlier rebound in global share prices, but investors began to worry they were overpriced, leading to a new sell-off.

Investors confidence has been supported by infusions of central bank credit into struggling economies and hopes for development of a coronavirus vaccine.

A monthly unemployment report due out on Friday from the government could help to shed light on an economic recovery.

In energy markets, benchmark US crude lost 31 cents per barrel to USD40.28 in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, shed 32 cents to USD42.55 per barrel in London.

The dollar gained to JPY105.60 from Monday’s JPY105.51. The euro rose to USD1.1690 from USD1.1676.