World shares mixed as investors eye vaccines, US stimulus

AP – Shares opened higher in Europe yesterday after a lackluster day in Asia as investors wait to see if Congress can break a logjam on delivering more aid to people, businesses and local governments affected by the coronavirus pandemic.

Markets are also watching for the outcome of a meeting by the Federal Reserve, which ends today. No change in interest rates is expected, but the Fed could announce steps to try to offset the pandemic’s increasing drag on growth.

Benchmarks rose in Paris, Frankfurt and London but fell in Tokyo and Shanghai. United States (US) futures advanced.

Talks on terms of Britain’s departure from the European Union (EU) have continued, with the EU’s Chief Negotiator Michel Barnier saying he still firmly believes that a post-Brexit trade agreement is possible.

Only two main issues remain to be settled as the two sides teeter on the brink of a no-deal departure. They have committed to a final push ahead of January 1, when a transitional period following Britain’s January 31 departure from the bloc is to end.

Britain’s FTSE advanced 0.2 per cent to 6,543.63 while the CAC 40 in Paris climbed 0.3 per cent to 5,543.03. Germany’s DAX also rose 0.3 per cent, to 13,262.06. Futures for the S&P 500 and Dow industrials were up 0.5 per cent.

During Asian trading, Japan’s benchmark Nikkei 225 index fell 0.3 per cent to 26,687.84 after Prime Minister Yoshihide Suga announced the suspension of a travel promotion programme that has helped businesses but also is thought to have contributed to a resurgence of coronavirus outbreaks.

A currency trader near screens showing the Korean Securities Dealers Automated Quotations at the foreign exchange dealing room in Seoul, South Korea. PHOTO: AP

The programme was suspended from December 28 until January 11 next year, basically the entire New Year rush period, when most families head out on holidays or back to their hometowns. The Go To Travel programme and another dubbed Go To Eat mainly provided steep discounts on hotel rooms and meals and has helped cushion the blow from the loss of nearly all inbound foreign tourism due to pandemic-related controls and concerns.

China’s government also announced a raft of monthly statistics showing retail sales, industrial output and investments in factory equipment and other fixed assets rose as expected in November. However, the Shanghai Composite index declined 0.2 per cent to 3,367.23.

Other regional benchmarks also retreated. Hong Kong’s Hang Seng lost 0.7 per cent to 26,207.29. South Korea’s Kospi lost 0.2 per cent to 2,756.82 while the S&P/ASX 200 in Australia shed 0.4 per cent to 6,631.30.

“Asia appears to have moved into a wait-and-see state, ahead of the Federal Reserve rate decision on Thursday Asian time, and more clarity of US stimulus progress,” Jeffrey Halley of Oanda said in a commentary.

India’s Sensex was the rare regional gainer, adding 0.2 per cent to 46,326.61.

Extending its pullback from recent months of gains, the S&P 500 fell 0.4 per cent to 3,647.49 on Monday after having gained 0.9 per cent earlier in the session. It was its fourth straight decline, the first since September.

Treasury yields were mostly higher, a sign of optimism in the economy. The yield on the 10-year Treasury was steady at 0.90 per cent.

The Dow Jones Industrial Average dropped 0.6 per cent to 29,861.55. The Nasdaq rose 0.5 per cent to 12,440.04. Smaller companies held up better than their larger rivals, as the Russell 2000 index gained 2.16 points, or 0.1 per cent, to 1,913.86.

Americans began receiving the country’s first vaccinations against COVID-19 on Monday, a process that’s expected to take months.

Healthcare workers and nursing home residents are first in line for the shots, and the hope is that a wider rollout next year will help curb the pandemic and pull the economy back toward normal following the devastation of this year.

The economy is slowing as coronavirus counts surge and governments restore varying restrictions on social activity and businesses.

Top Washington negotiators have persevered with efforts to find agreement on COVID-19 relief on Monday. Those talks have been stalled by bitter partisanship, with rank-and-file Democrats appearing increasingly resigned to dropping, for now, a scaled-back demand for fiscal relief for states and local governments whose budgets have been thrown out of balance by the pandemic.

“Again, it feels like we are stuck in the negative feedback loop,” Stephen Innes of Axi said in a commentary. “Unless policymakers overdeliver on market expectations, especially at this time of year when our risk-taking proclivities give way to profit-taking, it seems virus-related economic restrictions will never cease to weigh as the market (continues) to straddle that fence between hope and reality.”

In other trading, benchmark US crude oil shed 13 cents to USD46.86 per barrel in electronic trading on the New York Mercantile Exchange. It gained 42 cents to USD46.99 per barrel on Monday.

Brent crude, the international standard, gave up 18 cents to USD50.11 per barrel.

The US dollar rose to JPY104.12 from JPY104.06 late Monday. The euro weakened to USD1.2135 from USD1.2145.