World shares, futures lower after latest record S&P 500 high

AP – Global shares and Wall Street futures slipped yesterday as buying enthusiasm waned after the S&P 500 and Nasdaq composite index both set fresh record highs.

Benchmarks fell in Paris, London, Hong Kong and Shanghai but climbed in Tokyo and Seoul.

Investors are betting that coronavirus vaccines may bring on a fuller global economic recovery despite the challenges of immunising billions of people.

Pfizer and BioNTech said they’ve won permission for emergency use of their COVID-19 vaccine in Britain, the world’s first coronavirus shot that’s backed by rigorous science — and a major step toward eventually ending the pandemic.

The move makes Britain one of the first countries to begin vaccinating its population as it tries to curb Europe’s deadliest COVID-19 outbreak.

Renewed talk of a possible United States (US) stimulus package failed to drive major gains in most world markets as investors adopted a “wait and see” stance after so many failed attempts to forge an agreement on additional help for the economy as the US endures fresh waves of coronavirus infections and resulting pandemic precautions.

Germany’s DAX shed 0.4 per cent to 13,328.15 and the CAC 40 in Paris gave up 0.3 per cent to 5,568.21. In Britain, the FTSE 100 edged 0.1 per cent lower to 6,381.53. The future for the S&P 500 slipped 0.3 per cent while the contract for the Dow industrials lost 0.4 per cent.

A woman walks by an electronic stock board of a securities firm in Tokyo. PHOTO: AP

Australia’s S&P/ASX 200 was almost unchanged at 6,590.20 after officials reported the economy expanded 3.3 per cent in July-September from the previous quarter as the country recovered from pandemic lockdowns. That lifted the country out of recession, although in annual terms the economy contracted 3.8 per cent from a year earlier.

“The rebound in Q3 GDP reversed around 40 per cent of the decline during the first half of the year and we expect output to return to pre-virus levels by mid-2021,” Ben Udy of Capital Economics said in a commentary.

Hong Kong’s Hang Seng fell 0.1 per cent to 26,532.58, while the Nikkei 225 in Tokyo edged 0.1 per cent higher to 26,800.98.

South Korea’s Kospi gained 1.6 per cent to 2,675.90 and the Shanghai Composite index edged 0.1 per cent lower, to 3,449.39. India’s Sensex gave up 0.9 per cent.

Overnight, the S&P 500 gained 1.1 per cent to 3,662.45, with Big Tech companies and banks driving a big part of the rally. The strong opening to December follows a 10.8 per cent surge for the broad index in November, marking its best month since April. The tech-heavy Nasdaq climbed 1.3 per cent to 12,355.11. Both indexes beat the record highs they set last Friday.

Treasury yields also rose in another sign of optimism from investors.

The Dow Jones Industrial Average gained 0.6 per cent to 29,823.92, while the Russell 2000 index picked up 0.9 per cent, to 1,836.05.

News that former Federal Reserve Chairperson Janet Yellen had accepted President-elect Joe Biden’s nomination to be his treasury secretary also lifted sentiment, analysts said.

European regulators could approve the vaccine developed by drugmakers Pfizer and BioNTech within four weeks.

The companies have already asked for approval to begin vaccinations in the US in December.

Moderna is also asking US and European regulators to allow emergency use of its COVID-19 vaccine.

The yield on the 10-year Treasury was steady at 0.92 per cent after jumping from 0.83 per cent late Monday, a big move. The higher yields also helped bolster financial stocks, since they allow banks to charge more lucrative interest rates on loans.

In other trading, US benchmark crude oil shed 14 cents to USD44.41 per barrel in electronic trading on the New York Mercantile Exchange. It lost 79 cents to USD44.55 per barrel on Tuesday. Brent crude, the international standard, lost six cents to USD47.36 per barrel.

The OPEC oil producers’ cartel continued talks on Tuesday about how much to pump next year as countries wrestled over whether to extend the production cuts that have been supporting prices depressed by the pandemic.

Members put off from Tuesday to tomorrow a meeting with non-OPEC oil producers like Russia, who have been coordinating their actions with the cartel in recent years to increase their influence.

The pandemic has sapped demand for fuel across the economy, leading oil producers to cut back production this year to keep prices from sagging even further. Yet lower output means less revenue for governments depending on oil sales to fill state coffers.

The US dollar strengthened to JPY104.57, up from JPY104.34 on Tuesday. The euro weakened to USD1.2055 from USD1.2072.