By Yuri Kageyama
TOKYO (AP) — Global shares rose Monday, cheered by upbeat projections for a global economic rebound that were tempered by worries over expanding coronavirus outbreaks.
France’s CAC 40 rose 0.6% in early trading to 5,000.05. Germany’s DAX added 0.9% to 12,742.34, while Britain’s FTSE 100 climbed 0.7% to 6,139.18. U.S. shares were set to drift higher, with Dow futures gaining 0.3% to 26,005.0. S&P 500 futures rose 0.2% to 3,185.38.
Investors were looking ahead to the release later this week of China’s economic growth data for April-June, a key indicator for trade, manufacturing and investments with implications for the entire region. Singapore is also releasing GDP data.
Japan’s benchmark Nikkei 225 climbed 2.2% to finish at 22,784.74. South Korea’s Kospi gained 1.7% to 2,186.06. Australia’s S&P/ASX 200 added nearly 1.0% to 5,977.50. Hong Kong’s Hang Seng rose 0.2% to 25,772.12, while the Shanghai Composite was up 1.8% at 3,443.29.
Shares also rose in India and Taiwan but fell in Singapore and Thailand.
Investors are hoping for an improved outlook thanks to the reopening of China’s economy following its own early outbreaks, share prices are much higher than justified by the numbers, analysts said.
“I do not think there will be any way to sugar-coat a disastrous Q2,” said Stephen Innes of AxiCorp. “Still, I am not sure how significant the numbers will be given the premise that investors are paying a top premium for technology stocks based on 2021 rebound earnings.”
On top of central bank policy meetings in Japan and elsewhere, corporate earnings are looming.
“According to FactSet, the estimated earnings decline for the S&P 500 index sits at -44.6%, representing a whole different world compared to the S&P 500 index that is approximately 6% away from its previous all time,” said Jingyi Pan of IG.
“Reconciliation between the two could take place going into the earnings season, although one suspect there may be some meeting in the middle here,” Pan said. “Better than expected recovery on the U.S. economic data front had so far inspired some convictions that the bar may have been set too low.”
Junichi Makino, senior economist at SMBC Nikko, noted consumption was recovering in Japan, starting in May, helped by the government cash handouts doled out to curb the pandemic fallout.
“It appears that the fears about the outbreak have declined, and sentiments are picking up,” he said, noting there was no lockdown in Japan though people were asked to social distance and work from home.
In energy trading, benchmark U.S. crude oil dropped 48 cents to $40.07 a barrel in electronic trading on the New York Mercantile Exchange. It rose 93 cents to $40.55 per barrel on Friday. Brent crude fell 47 cents to $42.77 a barrel.
The U.S. dollar edged up to 107.09 Japanese yen from 106.92 yen. The euro inched up to $1.1308 from $1.1298.
Source: AP News