World shares mixed as earnings take centre stage

BANGKOK (AP) — Shares rose yesterday in Europe and United States (US) futures edged higher as corporate earnings took the spotlight after a day of declines in Asia.

Germany’s DAX gained 0.4 per cent to 15,189.03 and the CAC 40 in Paris jumped 0.7 per cent to 6,206.80. Britain’s FTSE 100 added 0.7 per cent to 6,905.16. Wall Street looked set for a tepid start, with the future for the S&P 500 up less than 0.1 per cent and that for the Dow industrials up 0.1 per cent.

Worsening coronavirus outbreaks in Asia have cast a shadow over prospects for a regional recovery.

But investors also are focussing on a stream of company earnings reports, looking to see if Corporate America is recovering with the rest of the economy. This week roughly 80 members of the S&P 500 are due to report results, as well as one out of every three members of the Dow.

On average, analysts expect quarterly profits across the S&P 500 to climb 24 per cent from a year earlier, according to FactSet.

Asian governments are scrambling to secure supplies of COVID-19 vaccines after seeing infection numbers surge in recent weeks. The rising caseloads are straining medical systems from Japan to India and leading to a restoration of pandemic precautions such as travel restrictions, quarantine requirements and a dimming of nightlife.

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

The Nikkei 225 in Tokyo gave up just over 2.0 per cent to 28,508.55 while Hong Kong’s Hang Seng declined 1.8 per cent to 28,621.92. In Seoul, the Kospi lost 1.5 per cent to 3,171.66, while Sydney’s S&P/ASX 200 shed 0.3 per cent to 6,997.50. The Shanghai Composite index ended flat at 3,472.93. Worsening outbreaks in India and Thailand have also cast a pall on a recovery in travel, which in turn is clouding the outlook for oil and fuel prices, Stephen Innes of Axi said in a commentary.

Yesterday the S&P 500 closed at 4,134.94. The Dow Jones Industrial Average lost 0.8 per cent to 33,821.30. After shedding an early gain, the technology-heavy Nasdaq slid 0.9 per cent, to 13,786.27.

The Russell 2000 index of smaller company stocks, which has been outpacing the broader market all year, shed two per cent to 2,188.21.

The yield on the 10-year Treasury fell to 1.57 per cent from 1.60 per cent.

Investors have turned defensive, favouring utilities, real estate stocks and a mix of companies that make consumer staples like food and household products.

The market has been swaying between gains and record highs to pullbacks as investors weigh solid economic growth against the risks still posed by the pandemic. That push and pull will likely continue as vaccine distribution rolls on and various industries re-open.

“In the near term, speculative momentum has waned with US earnings season starting to look like a buy the rumour, sell the fact scenario,” Jeffrey Halley of Oanda said in a report.

In other trading, benchmark US crude oil lost 27 cents to USD62.40 per barrel in electronic trading on the New York Mercantile Exchange. It gave up 76 cents to USD62.67 per barrel on Tuesday. Brent crude, the international standard, declined 25 cents to USD66.32 per barrel.