Global shares mostly rise, momentum fizzles on virus worries

Yuri Kageyama Ap Business Writer
Tuesday, August 24, 2021

TOKYO (AP) — Global shares mostly gained Tuesday, boosted by a near-record rise on Wall Street, although the momentum began to fizzle over worries about the economic fallout from surging coronavirus infections in Asia.

France’s CAC 40 was little changed, inching down less than 0.1% to 6,682.28 in early trading, while Germany’s DAX added 0.2% to 15,884.33. Britain’s FTSE 100 slid 0.1% to 7,103.75. U.S. shares were set to drift higher with Dow futures gaining nearly 0.2% to 35,334.00. S&P 500 futures were up 0.2% at 4,485.75.

Japan’s benchmark Nikkei 225 rose 0.9% to finish at 27,732.10. South Korea’s Kospi gained 1.6% to 3,138.30. Australia’s S&P/ASX 200 rose 0.2% to 7,503.00. Hong Kong’s Hang Seng added 2.5% to 25,727.92, while the Shanghai Composite was up 1.1% at 3,514.47.

Some parts of Asia have had slower vaccine rollouts than the U.S. and Europe and are at a greater risk for the more contagious delta variant.

“Outbreaks in Asia Pacific have led to new containment measures, disrupting production and trade in a region that accounts for 37% of global merchandise exports,” said Sara Johnson, executive director, global economics, IHS Markit. “Asia Pacific’s manufacturing hubs are the current hotspots for COVID-19.”

She noted vaccination campaigns outside mainland China have been slow in Asia, hurting consumer spending, tourism, industrial production and exports. The IHS Markit manufacturing PMI surveys for July show deteriorating business conditions in Indonesia, Malaysia, Myanmar, Thailand and Vietnam. Cases of COVID-19 infections have been falling in India, Taiwan and Indonesia, but rising in Japan, South Korea, Malaysia, the Philippines and Vietnam.

“Risk-on sentiments largely followed through with the positive lead from U.S. indices overnight. Some catchup growth may be on watch, considering that Asian markets have been diverging in performance from their Western counterparts since June. Ongoing COVID-19 risks continue to be prevalent,” said Yeap Jun Rong, market strategist at IG in Singapore.

The market remains in a summer slowdown, with late August being historically one of the slowest times for trading with the exception of the Christmas holiday season. Markets are expected to pick up in volume and volatility after the Labor Day weekend.

Investors will be looking to the Federal Reserve as the Kansas City Fed’s annual conference in Jackson Hole, Wyoming starts later this week. It will likely provide Wall Street with more insight into what the Fed may do about inflation.

In energy trading, benchmark U.S. crude rose 66 cents to $66.30 a barrel. Brent crude, the international standard, added 78 cents to $69.53 a barrel.

In currency trading, the U.S. dollar edged up to 109.75 Japanese yen from 109.69 yen. The euro cost $1.1736, inching down from $1.1743.

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