Global Shares Mostly Higher Tuesday 08/16 05:57
Global shares mostly rose Tuesday, despite investor risk reflected in
negative economic data out of China, and analysts warned that volatility may
TOKYO (AP) -- Global shares mostly rose Tuesday, despite investor risk
reflected in negative economic data out of China, and analysts warned that
volatility may lie ahead.
European shares gained in early trading. The benchmark in Tokyo finished
little changed, while indexes in South Korea and Australia gained. Hong Kong's
benchmark slipped, while Shanghai shares rose.
France's CAC 40 added 0.4% in early trading to 6,598.28. Germany's DAX rose
0.6% to 13,904.68. Britain's FTSE 100 added 0.4% to 7,539.93. U.S. shares were
set to drift moderately lower with Dow futures inching down to 33,869.00. S&P
500 futures fell nearly 0.1% to 4,295.00.
Falling oil prices are one positive factor for the region. In Japan, recent
economic data have shown a recovery, but high rates of COVID-19 are fueling
fears people will hold back on travel and other economic activity.
Some analysts say stock prices haven't properly reflected real risks.
"It doesn't seem to matter what the news is, there is just a huge appetite
to buy stocks. And to keep buying," said Clifford Bennett, chief economist at
ACY Securities. "Talk of the bottom having already been priced in seems
somewhat premature. Should the market turn down again after all this long
positioning, it will fall with a thunderous impact. Buyers beware."
Japan's benchmark Nikkei 225 was little changed and finished at 28,868.91.
South Korea's Kospi rose 0.2% to 2,533.52. Australia's S&P/ASX 200 added 0.6%
to 7,105.40. Hong Kong's Hang Seng reversed course and was down 1.1% at
19,830.52, while the Shanghai Composite gained nearly 0.1% to 3,277.88.
Markets reacted to news overnight that China's central bank cut a key
interest rate, acknowledging more needed to be done to shore up its economy.
The move is the latest warning for markets already on edge over record-high
inflation and fears about recessions in the U.S. and elsewhere.
China is the world's second-largest consumer of crude oil, so the news
weighed on energy prices. U.S. crude oil prices slumped 2.9% on worries about
the global economy and weighed heavily on energy stocks.
In Tuesday trading, benchmark U.S. crude fell $1.46 to $87.95 a barrel.
Brent crude, the international standard, lost $1.73 to $93.37.
Global investors are worried that the U.S. Federal Reserve could hit the
brakes too hard and send the economy into a recession. Any signal that
inflation could be peaking or retreating has helped ease some of those worries.
"Lack of direction is what investors will be suffering until we see clearer
signs of inflation abating. And that will take time, as we must see a couple of
encouraging data points to call the central banks' inflation fight successful.
The lack of clear direction is driving the markets up and down," said Ipek
Ozkardeskaya, senior analyst at Swissquote Bank.
Investors are also keeping a close watch on how inflation is affecting
businesses and consumers. Spending has slowed and the broader economy has
already contracted for two straight quarters. Several big retailers will give
investors more detail on how their businesses are holding up when they report
earnings this week.
Home Depot and Walmart report their results on Tuesday, and Target's results
are due on Wednesday. The U.S. Commerce Department also releases its July
retail sales report on Wednesday. Economists surveyed by FactSet expect modest
0.2% growth from June, when sales rose 1%.
In currency trading, the U.S. dollar edged up to 133.85 Japanese yen from
133.27 yen. The euro cost $1.0145, down from $1.0165.