World shares mixed, Europe advances after fresh S&P 500 high

TOKYO (AP) — Shares roses in early European trading yesterday after the S&P 500 index hit another record high.

Germany’s DAX added 0.6 per cent to 12,605.28 while the CAC 40 in Paris also climbed 0.6 per cent, to 5,609.54. Britain’s FTSE 100 picked up 0.5 per cent to 7,598.88.

The United States (US) shares looked set for gains ahead of the Independence Day holiday, with the future contract for the S&P 500 up 0.1 per cent at 2,983.90. The future for the Dow Jones Industrial Average also edged 0.1 per cent higher, to 26,833.00.

“With the G-20 Summit in the rear-view mirror, we look around the markets and revert to what are the clear drivers — liquidity, and the view of further aggressive central bank easing and increased money supply,” Chris Weston of Pepperstone said in a commentary.

European markets have been buoyed by the nomination of IMF Head Christine Lagarde to head the European Central Bank (ECB). A former French Finance Minister Lagarde has backed the stimulus efforts of the current ECB Chief Mario Draghi, who was credited with defusing the eurozone’s debt crisis.

A man walks past an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo. – AP

Markets were less upbeat in Asia as the euphoria from President Donald Trump’s truce with China’s Xi Jinping on trade faded. The Shanghai Composite index sank 0.9 per cent to 3,015.20 while Japan’s Nikkei 225 index lost 0.5 per cent to 21,638.16. The Hang Seng in Hong Kong declined 0.1 per cent to 28,855.14, while South Korea’s Kospi lost 1.2 per cent to 2,096.02. Australia’s S&P ASX 200 advanced 0.5 per cent to 6,685.50 and the Sensex in India edged 0.2 per cent higher to 39,910.53. Shares fell in most Southeast Asian markets.

Traders are waiting to see what will come from the latest truce in the US-China trade war. They’re also looking ahead to a key government jobs report due out tomorrow, among other potential market-moving developments in the next few weeks.

Trump began ramping up tariffs on Chinese exports a year ago, prompting Beijing to follow suit. The two sides are now imposing punitive tariffs on billions of dollars’ worth of each other’s products.

Trump and Xi agreed over the weekend to resume trade talks. The US also agreed not to impose more tariffs on the world’s second-largest economy, and to allow sales of technology to Huawei Technologies.

The detente was good news for markets, but tariffs in place have already hurt global economic growth, and investors see that the two sides still face the same differences that caused talks to break down earlier.

“The post-G20 optimism remained short-lived,” Ipek Ozkardeskaya of London Capital Group said in a commentary, “as White House trade adviser Navarro reminded investors that agreeing on a trade deal between the US and China will certainly take time, although the countries moved in the right direction at the latest G-20 summit.”

Chinese Premier Li Keqiang said on Tuesday that China plans to lift foreign ownership limits in securities, futures and life insurance by 2020, a year earlier than originally scheduled. So far, though, Beijing’s efforts to soothe trade tensions by accelerating certain markets have not addressed specific complaints from the Trump administration over Chinese industrial policies and the huge, longstanding Chinese trade surplus.

In commodities trading, benchmark crude oil gained two cents to USD56.27 per barrel in electronic trading on the New York Mercantile Exchange. It fell USD2.84 to settle at USD56.25 a barrel overnight.

Brent crude, the international standard, shed four cents to USD62.36 per barrel. It lost USD2.66 to close at USD62.40 a barrel on Tuesday.

The dollar fell to 107.73 Japanese yen from 107.90 yen on Tuesday. The euro slipped to USD1.1284 from USD1.1286.