World shares mixed after tech-led drop on Wall Street

AP – World markets were mixed yesterday after selling of technology and health services companies’ shares ended a winning streak on Wall Street.

Shares advanced in London, Paris and Shanghai but fell in Tokyo and Hong Kong.

As coronavirus vaccines move closer to distribution, markets have been pushing higher on hopes the pandemic will begin to ease, allowing economies to recover.

A vaccine from Pfizer and German partner BioNTech, which is already in use in the United Kingdom (UK), is on track for a positive review and potential approval in the United States (US) within the next week. The Food and Drug Administration (FDA) will also consider a vaccine developed by Moderna later this month.

In other developments, European Commission President Ursula von der Leyen and UK Prime Minister Boris Johnson agreed to extend until Sunday efforts to end four years of diplomatic heartburn and salvage a trade deal for after the UK’s departure from the bloc. Otherwise, they face a tumultuous no-deal split at the end of the month, threatening hundreds of thousands of jobs and billions in losses.

Britain’s FTSE 100 rose 0.4 per cent to 6,588.61 on Thursday while the DAX in Germany edged 0.1 per cent higher, to 13,350.48. France’s CAC 40 gained 0.3 per cent to 5,563.23.

Wall Street looked set for a slow start with the future for the S&P 500 down less than 0.1 per cent while the future for the Dow industrials was nearly unchanged.

People stand in front of a bank’s electronic board showing the Hong Kong share index. PHOTO: AP

The recent surge in coronavirus cases in many countries and tighter restrictions on businesses to counter them have again raised the importance of a vaccine and for more help for beaten down businesses.

“Stocks have not fallen too far out of bed as the market knows that stimulus in some form is coming,” Stephen Innes of Axi said in a commentary. “Vaccine brightens the medium-term outlook, but what about us over the months to come, the Main Street asks?”

In Asia, vaccine rollouts look likely to be slower. Outbreaks have been waxing and waning as governments seek a balance between pandemic precautions and economic exigency. The Shanghai Composite index inched less than 0.1 per cent higher, to 3,373.28. Hong Kong’s Hang Seng index slipped 0.4 per cent to 26,410.59 and the Nikkei 225 index in Tokyo gave up 0.2 per cent to 26,756.24. In South Korea, the Kospi shed 0.3 per cent to 2,746.46.

Australia’s S&P/ASX 200 declined 0.7 per cent to 6,683.10 after China’s government has announced extra import taxes on Australian wines, stepping up pressure amid a bitter diplomatic conflict over the coronavirus, territorial disputes and other irritants.

The Chinese Ministry of Commerce said an investigation found Australia improperly subsidises wine exports, hurting Chinese producers. It imposed a countervailing tax of 6.3 per cent to 6.4 per cent. China, Australia’s biggest export market, already has effectively blocked imports of Australian wine by imposing taxes of more than 200 per cent. Beijing also has blocked imports of Australian beef, wheat and other goods since Australia’s government expressed support for an independent investigation into the origins of the coronavirus.

Overnight, the S&P 500 index fell 0.8 per cent to 3,672.82, as losses in technology companies outweighed gains in industrial, energy and materials stocks. The Dow Jones Industrial Average lost 0.4 per cent to 30,068.81, while the tech-heavy Nasdaq composite fell 1.9 per cent to 12,338.95.

The Russell 200 index of small company stocks gave up 0.8 per cent, to 1,902.15.

Investors are closely watching for developments on another shot of stimulus for American people, businesses and state governments. Congress is still divided over the size and scope of any new package. The Trump administration’s latest proposal is for USD916 billion in support.

The yield on the 10-year Treasury was at 0.92 per cent, just below its level of 0.94 per cent late Wednesday.

In other trading, US benchmark crude oil gained 23 cents to USD45.75 per barrel in electronic trading on the New York Mercantile Exchange. It lost eight cents to USD45.52 per barrel on Wednesday.

Brent crude, the international standard, added 22 cents to USD49.08 per barrel.

The dollar strengthened to JPY104.55 from JPY104.24 late Wednesday. The euro rose to USD1.2095 from USD1.2083.