World markets mixed on virus, vaccine, stimulus concerns

BANGKOK (AP) — Shares opened higher in Europe yesterday after a broad retreat in Asia driven by renewed worries that troubles with COVID-19 vaccine rollouts and the spread of new variants of coronavirus might delay a recovery from the pandemic.

Germany’s DAX surged 0.7 per cent to 13,738.24 and the CAC 40 in Paris gained 0.4 per cent to 5,493.14.

The FTSE 100 in Britain picked up 0.5 per cent to 6,674.87. US markets looked set for a downbeat start, with the future contract for the S&P 500 down 0.3 per cent while that for the Dow industrials lost 0.2 per cent.

Traders are keeping a wary eye on rising coronavirus infections in various countries and a bumpy rollout of vaccinations in the United States (US). The spread of variants that are thought to be more easily transmissible and might be less effectively targetted by existing vaccines is adding to alarm.

Vaccine maker Moderna said on Monday it will study whether a booster shot would be needed to protect against variants of the coronavirus, “out of an abundance of caution”.

“Nowadays the market mood is set by either the hopes that the COVID-19 vaccine would mark the end of the biggest economic downturn of our lifetime, or the stimulus hopes to keep our heads above water. Yesterday, both hopes got smashed,” Swissquote Bank Senior Analyst Ipek Ozkardeskaya said in a commentary.

People walk past a bank’s electronic board showing the Hong Kong share index at Hong Kong Stock Exchange in Hong Kong. PHOTO: AP

The Hang Seng in Hong Kong gave up 2.6 per cent to 29,391.26. Japan’s Nikkei 225 index declined one per cent to 28,546.18, while the Shanghai Composite index dropped 1.5 per cent to 3,569.43.

South Korea’s Kospi lost 2.1 per cent to 3,140.31. Shares also fell in Southeast Asia.

Markets in Australia and India were closed for holidays.

Stocks swerved to a mixed finish on Wall Street on Monday, ahead of a deluge of corporate earnings reports scheduled to arrive this week.

The S&P 500 rose 0.4 per cent to 3,855.36 while the Dow Jones Industrial Average dipped 0.1 per cent to 30,960.00. The Nasdaq composite, which is packed with tech stocks, rose 0.7 per cent to 13,635.99 and another record.

The Russell 2000 index of smaller stocks fell 0.3 per cent, to 2,163.27. The yield on the 10-year Treasury sank to 1.03 per cent from 1.07 per cent on Friday.

Over 100 companies in the S&P 500 are scheduled to tell investors this week how they fared during the last three months of 2020. They include American Express, Johnson & Johnson, 3M, AT&T and Tesla.

As a whole, analysts expect S&P 500 companies to say their fourth-quarter profit fell five per cent from a year earlier. That’s a milder drop than the 9.4 per cent they were forecasting earlier this month, according to FactSet.

US 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, making approval uncertain.

Several Republicans have already voiced opposition to parts of the plan.

The coronavirus pandemic is also worsening and doing more damage by the day.

A United Nations (UN) agency said on Monday four times as many jobs were lost last year as in 2009, during the global financial crisis.

The Federal Reserve started a two-day meeting on interest-rate policy yesterday, and the wide expectation is for it to keep the accelerator floored on its stimulus for the economy
and markets.

It said it plans to keep interest rates low even if inflation rises above its two per cent target.

In other trading yesterday, US benchmark crude oil lost 23 cents to USD52.54 per barrel in electronic trading on the New York Mercantile Exchange. It gained 50 cents to USD52.77 per barrel on Monday.

Brent crude, the international standard, shed 24 cents to USD55.44 per barrel.

The US dollar strengthened to JPY103.80 from JPY103.76 on Monday.

The euro dropped to USD1.2130 from USD1.2141.