Global Shares Mixed Amid Worries Over Virus Impact On Growth
Tue Jun 30 2020
Mark Cooper (2113 articles)

Global Shares Mixed Amid Worries Over Virus Impact On Growth

World shares were mixed on Tuesday, with European benchmarks falling after a day of gains in Asia that carried over from a rally on Wall Street.

Asian shares were buoyed by stronger than expected manufacturing data from China. But other new economic indicators were mixed. As coronavirus outbreaks expand in many countries, analysts say prospects for a global recovery from the pandemic remain uncertain.

France’s CAC 40 lost 0.3% to 4,929.29, while Germany’s DAX shed 0.2% to 12,206.34. Britain’s FTSE 100 lost 0.7% to 6,181.71. U.S. shares were set to drift lower with Dow futures down 0.6% at 25,333.00. S&P 500 futures were down 0.4% at 3,034.30.

A survey of China factory managers released Tuesday was better than expected, suggesting the global economy may be on the upswing after bottoming out at the height of shutdowns in April-May, analysts said.

The monthly purchasing managers’ index released by the national statistics agency and an industry group rose to 50.9 from May’s 50.6 on a 100-point scale on which numbers above 50 show activity expanding.

China, where the coronavirus pandemic began in December, was the first economy to reopen. Factory and other activity is reviving but global demand is weak and Chinese consumers, worried about losing jobs, are reluctant to spend.

Forecasters say global demand for Chinese goods is uncertain as infections rise in the United States, Brazil and some other countries.

Increases in production and new orders point to a rebound in foreign demand, though export demand remains much weaker than overall new orders, said Martin Rasmussen, an economist at Capital Economics.

Further clouding the outlook, Japan reported a plunge in factory output in May, and Spain released statistics showing that its economy contracted 5.2% during the first three months of the year from the previous quarter.

The mixed signals have investors swinging between optimism and gloom.

“These will be important questions to answer as equity markets hang in a delicate balance at present,” Jingyi Pan, market strategist at IG, said in a commentary.

Japan’s benchmark Nikkei 225 gained 1.3% to finish at 22,288.14. South Korea’s Kospi gained 0.7% to 2,108.33, while Australia’s S&P/ASX 200 rose 1.4% to 5,897.90. Hong Kong’s Hang Seng gained 0.5% to 24,427.19. The Shanghai Composite closed at 2,984.67, up 0.8%.

India’s Sensex edged 0.1% lower, while shares rose in Taiwan and Southeast Asia.

Countries across Asia are in various stages of the pandemic. Some will not resume normal economic activity for some time because of continuing restrictions and changing consumer behavior, analysts say.

The worry is that worsening outbreaks in the U.S. and elsewhere could choke off budding improvements in economies as governments ease up on pandemic restrictions.

Benchmark U.S. crude oil fell 53 cents to $39.17 in electronic trading on the New York Mercantile Exchange. It rose $1.21 to $39.70 a barrel on Monday. Brent crude oil for August delivery slipped 46 cents to $41.39 a barrel.

The dollar rose to 107.74 Japanese yen from 107.57 yen. The euro cost $1.1213, down from $1.1238.

Mark Cooper

Mark Cooper

Mark Cooper is Political / Stock Market Correspondent. He has been covering Global Stock Markets for more than 6 years.


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