Global shares edge lower on new COVID-19 outbreaks in Asia

  • 6/30/2021
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(Updates with Asia futures, changes headline tag) NEW YORK (Reuters) -Global shares edged lower on Tuesday, as new coronavirus outbreaks in Asia vied with strong U.S. and European consumer confidence, and investors speculated about whether the Federal Reserve would accelerate its timetable to end easy monetary policy. The U.S. dollar rose to a one-week peak on safe-haven buying stoked by fears that the highly contagious Delta variant could derail a burgeoning economic recovery. MSCI’s all country world index, which tracks shares across 50 countries, shed 0.06%, as declines in Asian equities undercut new highs in U.S and European markets. The Nasdaq closed at a record high, boosted by technology stocks and a government survey showing U.S. consumer confidence in June hit its highest level since the pandemic started. European shares ended higher after data there showed economic sentiment hit a 21-year high in June. The pan-European STOXX 600 index closed 0.3% higher at 456.37 points. Still, MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.55% lower, Japan’s Nikkei lost 0.81%, and Chinese stocks lost 0.92%. The Australian S&P/ASX 200 futures rose 0.46% in early trading, while Japan’s Nikkei 225 futures fell 0.07%. Investors are worried about the economic impact of the highly infectious Delta variant. Indonesia, Malaysia, Thailand and Australia are all battling outbreaks and tightening restrictions, and Spain and Portugal announced restrictions for unvaccinated British tourists. “These are headwinds to risk assets performing well, but if we step back, we are still looking at equity indices that continue to hit all time highs,” said Patrick Leary, chief market strategist and senior trader at Incapital. Investors are also waiting for the U.S. jobs due out on Friday, the results of which could influence Fed policy. Economists polled by Reuters are expecting a gain of 690,000 jobs for June, up from 559,000 in May. On Monday, Richmond Federal Reserve President Thomas Barkin said the U.S. central bank has made “substantial further progress” toward its inflation goal in order to begin tapering asset purchases. “A good number will speed up the debate about tapering asset purchases soon and raising rates sooner,” Leary said. Unofficially, the Dow Jones Industrial Average rose 20.24 points, or 0.06%, to 34,303.51, the S&P 500 gained 2.05 points, or 0.05%, to 4,292.66 and the Nasdaq Composite added 28.67 points, or 0.2%, to 14,529.17.[.N] The Nasdaq was boosted by Apple Inc, while the S&P was helped by Morgan Stanley’s news late Monday that it would double its dividend. Germany’s DAX added 0.9%, after Adidas lifted the German index with news of a share buy back plan. The U.S. dollar rose to a one-week peak. The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.2% to 92.077, with the euro down 0.19% to $1.19. Sterling was last $1.3849, down 0.24%. The Australian dollar fell 0.71% versus the greenback at $0.751. Oil prices rose as hopes for a demand recovery persisted despite new outbreaks of the Delta variant. Brent crude futures settled up 8 cents, or 0.11%, and U.S. crude settled up 7 cents, or up 0.10%. [O/R] Spot gold dropped 1.0% to $1,760.77 an ounce. U.S. gold futures fell 1.06% to $1,761.00 an ounce.[GOL/] Yields for benchmark 10-year U.S. Treasuries were last up less than a basis point at 1.4816%. [US/] Germany’s 10-year bond yield was up 1 basis point at -0.173%. Reporting by Tom Arnold in London and Elizabeth Dilts Marshall in New York; Editing by Chizu Nomiyama and Christopher Cushing Our Standards: The Thomson Reuters Trust Principles.

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