Global shares gain on recovery hopes, earnings outlook

TOKYO (AP) – Global shares mostly rose yesterday amid hopes economies slammed by the pandemic will bounce back, as attention turned to upcoming company earnings.

France’s CAC 40 slipped 0.2 per cent in early trading to 5,551.47. Germany’s DAX inched up nearly 0.1 per cent to 13,886.27. Britain’s FTSE 100 added nearly 0.1 per cent to 6,700.34. United States (US) shares were set for modest gains, with Dow futures up nearly 0.2 per cent at 30,962. S&P 500 futures were trading at 3,847.88, up 0.4 per cent. Japan’s benchmark Nikkei 225 gained 0.7 per cent to finish at 28,822.29. Australia’s S&P/ASX200 added 0.4 per cent to 6,824.70. South Korea’s Kospi gained 2.2 per cent to 3,208.99. Hong Kong’s Hang Seng jumped 2.4 per cent to 30,159.01, while the Shanghai Composite rose 0.5 per cent to 3,624.24.

Hopes are high that once the pandemic comes under some control, regional economies will make strong recoveries, with lockdowns easing and vaccines rollouts starting in various places, including Singapore.

“Vaccine breakthroughs make it likely that life will become more functional again at some point in 2021, resulting in higher gross domestic product (GDP) growth and more robust corporate earnings,” Stephen Innes, chief global markets strategist at Axi, said in a report.

“But increasing global COVID-19 infections, new variants of the virus, tightening social distancing restrictions and delays in vaccine rollouts in some places, all increase the near-term growth risks,” he said.

A woman walks past a bank’s electronic board at the Hong Kong Stock Exchange. PHOTO: AP

Markets have been mostly rallying recently on hopes that COVID-19 vaccines will lead to a powerful economic recovery later this year as daily life gets closer to normal. Hopes are also high that Washington will deliver another dose of stimulus for the economy now that the White House and both houses of Congress are under single control of the Democrats.

President Joe Biden has proposed a USD1.9 trillion plan to send USD1,400 to most Americans and deliver other support for the economy. But his party holds only the slimmest possible majority in the Senate, raising doubts about how much can be approved. Several Republicans have already voiced opposition to parts of the plan. The coronavirus pandemic is also worsening and doing more damage to the economy by the day.

In China, where the pandemic began in late 2019, the government has reimposed travel controls after outbreaks in Beijing and other cities. A spike in infections has authorities calling on the public to avoid travel during February’s Lunar New Year holiday, normally the year’s most important family event.

Massive support from central banks is providing a major underpinning for the markets. The Federal Reserve and others are holding short-term interest rates at record lows, among other measures to support economies until the pandemic can be brought under control.

In other trading, benchmark US crude rose 34 cents to USD52.61 a barrel in electronic trading on the New York Mercantile Exchange. It lost 86 cents to USD52.27 per barrel on Friday. Brent crude, the international standard edged up 30 cents to USD55.71 a barrel.

The US dollar fell to JPY103.74 from JPY103.83 late Friday. The euro cost USD1.2175, up from USD1.2169.