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World shares turn lower after tech-led decline on Wall Street

BANGKOK (AP) – World markets were lower yesterday, tracking a retreat on Wall Street led by declines in big technology stocks.

Shares fell in Paris, Frankfurt, Tokyo and Shanghai but rose in Hong Kong. United States (US) futures also slipped.

A resurgence of coronavirus outbreaks has added to uncertainties over a revival of tourism and other business activity in many parts of the world including Asia.

The World Health Organization (WHO) said a record 9.5 million COVID-19 cases were tallied over the last week as the Omicron variant of the coronavirus swept the planet, a 71 per cent increase from the previous seven-day period that the United Nations (UN) health agency likened to a “tsunami”.

Germany’s DAX lost 0.7 per cent to 15,942.67 while the CAC 40 in Paris declined 0.5 per cent to 7,215.30. Britain’s FTSE 100 lost 0.1 per cent to 7,443.90, The future for the Dow industrials lost 10 points while that for the S&P 500 slipped 0.2 per cent.

Germany’s leaders were set to consider possible new restrictions and changes to quarantine rules as the new Omicron variant was quickly advancing.

Chancellor Olaf Scholz and the country’s 16 state governors were likely to build on restrictions introduced just after Christmas that limited private gatherings to 10 people, among other things. Japan approved new restrictions yesterday to curb a sharp rise in coronavirus cases in the three most affected southwestern regions of Okinawa, Yamaguchi and Hiroshima.

People walk by an electronic stock board of a securities firm in Tokyo yesterday. PHOTO: AP

Asia has seen smaller numbers but infections are rising rapidly and bottlenecks in testing mean that still more cases are likely unreported. At the same time, alarm has been kept in check by signs the Omicron variant may cause less severe illness, especially in countries with high levels of vaccination against COVID-19.

“The highly transmissible Omicron variant is a near-term growth risk for low vaccinated emerging market economies, and to supply chains amid China’s zero-COVID strategy,” Sonal Varma of Nomura said in a report.

Tokyo’s Nikkei 225 index edged less than 0.1 per cent lower to 28,478.56 and the Hang Seng in Hong Kong jumped 1.8 per cent to 23,493.48. South Korea’s Kospi gained 1.2 per cent to 2,954.89, while the Shanghai Composite index shed early gains to fall 0.2 per cent, closing at 3,579.54. In Australia, the S&P/ASX 200 rose 1.3 per cent to 7,453.30.

Shares in Taiwan dropped 1.1 per cent and India’s Sensex was nearly unchanged.

On Thursday, the S&P 500 slipped 0.1 per cent to 4,696.05. The Dow slipped 0.5 per cent to 36,236.47. The Nasdaq composite lost 0.1 per cent to 15,080.86, while smaller company stocks bucked the broader market, with the Russell 2000 index gaining 0.6 per cent to 2,206.37.

Weakness in big tech companies like Apple was the main culprit.

Bonds continued to climb. The yield on the 10-year Treasury rose to 1.73 per cent, the highest level since March. It was 1.70 per cent late Wednesday.

The selling followed a broad slide for the markets on Wednesday, when the Federal Reserve indicated it was ready to raise interest rates to fight off inflation.

The US Labour Department reported that the number of Americans applying for unemployment benefits rose last week but remained at historically low levels, suggesting that the job market remains strong.

Much attention will be focussed on the US Labour Department’s monthly jobs report. A strong jobs report could add urgency to the Federal Reserve’s efforts to tackle inflation by raising interest rates.

In other trading yesterday, US benchmark crude oil added 54 cents to USD80.00 per barrel in electronic trading on the New York Mercantile Exchange. It jumped 2.1 per cent on Thursday, helping to push energy stocks higher.

Brent crude, the basis for pricing international oil, climbed 54 cents to USD82.53 per barrel.

The US dollar slipped to JPY115.90 from JPY115.85 late Thursday. The euro rose to USD1.1315 from USD1.1298.