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European shares rise, Asia declines, following Wall Street retreat

TOKYO (AP) – European benchmarks rose yesterday but Asian shares mostly declined following a retreat on Wall Street.

France’s CAC 40 added 0.6 per cent in early trading to 7,160.56, while Germany’s DAX added 0.7 per cent to 15,882.28. Britain’s FTSE 100 rose 0.4 per cent to 7,474.60. United States (US) shares were set to drift higher with Dow futures inching up less than 0.1 per cent to 35,965.00. S&P 500 futures rose nearly 0.1 per cent to 4,664.50.

Investors are keeping an eye on rising numbers of coronavirus cases, especially in China, where a third city has locked down its residents because of a COVID-19 outbreak, raising the number confined to their homes to about 20 million people.

“In China, upward momentum quickly faded and reversed as COVID-19 restrictions were tightened once again in some Chinese cities,” said senior market analyst at Oanda Jeffrey Halley.

Such disruptions can have regionwide implications for trade and other activity. Major companies, including automakers such as Toyota, had been counting on a recovery in the supply of semiconductor chips and other products from China and the rest of Asia, as vaccinations and other coronavirus prevention efforts has advanced. The recent surge in infections by the Omicron variant of coronavirus has shaken such hopes.

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

Japan is also seeing a dramatic surge in reported COVID cases, which experts said are mostly Omicron. Japan decided to keep strict border controls through next month, which ban the entry of travellers except for returning residents and citizens. Prime Minister Fumio Kishida said the large-scale facilities run by the Japanese military to give vaccinations, which had closed last year, will re-open to speed up booster shots. So far, fewer than one per cent of the population have received boosters.

Japan’s benchmark Nikkei 225 fell 0.9 per cent to finish at 28,222.48, coming back from a national holiday on Monday. South Korea’s Kospi picked up less than one point to 2,927.38.

Australia’s S&P/ASX 200 dipped 0.8 per cent to 7,390.10. Hong Kong’s Hang Seng inched down less than 0.1 per cent to 23,739.06, while the Shanghai Composite index sank 0.7 per cent to 3,567.44.

High inflation is taking a toll on American families, Federal Reserve Chair Jerome Powell acknowledged in remarks delivered at yesterday’s congressional hearing on Powell’s nomination to a second four-year term.

Higher interest rates make stocks of expensive tech companies and other pricey growth companies less attractive to investors, and the sector has been slipping as bond yields rise.

The tech sector has been the biggest weight on the market through January and is coming off of its worst week since October 2020.

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