Most shares bounce ahead of US holiday



The Manila Times

Foreign Business

BANGKOK: Most world shares rose while United States futures fell ahead of the July 4 Independence Day holiday in America on Monday. Benchmarks rose in London, Paris, Frankfurt and Tokyo, but fell in Hong Kong and Seoul. Last week was the fourth losing week in the last five for Wall Street as investors fret over high inflation and the possibility that higher interest rates could cause a recession. The most optimistic scenario — a “Goldilocks outcome” — would bring a slowdown significant enough to cool inflation running at its highest level in four decades, but not so strong as to result in a “hard landing,” Mizuho Bank said in a commentary. “This is a tall order that is far from guaranteed at this point,” it added, noting that markets would be looking to comments in minutes from the last Federal Reserve (Fed) policy meeting that are expected on Wednesday. Economic data over the last few weeks has shown that inflation remains hot and the US economy is slowing. The latter has raised hopes on Wall Street that the Fed would eventually ease off its push to raise rates, which have been weighing on stocks, especially pricier sectors like technology. Analysts don’t expect much of a rally for stocks until there are solid signs that inflation is cooling, and the latest data is yet to show that. Last Friday brought a report that inflation in countries using the euro had set another eyewatering record, pushed higher by a huge increase in energy costs fueled partly by Russia’s invasion of Ukraine. Annual consumer price growth in the eurozone’s 19 countries hit 8.6 percent in June, surging past May’s 8.1 percent, according to the latest numbers published by Eurostat, the European Union’s statistics agency. The latest rate is its highest since record keeping for the euro began in 1997. In Asia, Tokyo’s Nikkei 225 rose 0.8 percent to 26,153.81 on Monday. Shares in Japanese telecommunications carrier KDDI Corp. lost 1.7 percent. They fell as much as 4 percent earlier on Monday as the company grappled with outages that began on Saturday, affecting services to nearly 40 million people. The company said on Monday most data-transmission services had been restored, but phone calls were still affected by the problems, which KDDI said were technical issues with switching systems. The Shanghai Composite index grew 0.5 percent to 3,405.43. Australia’s S&P/ASX 200 climbed 1.1 percent to 6,612.60. Hong Kong’s Hang Seng index slipped 0.1 percent to 21,830.35 and the Kospi in Seoul declined 0.2 percent to 2,300.34. India’s Sensex advanced 0.3 percent while shares fell in Bangkok and Taiwan. Last Friday, the S&P 500 rose 1.1 percent, recovering from early losses to close at 3,825.33. The gain snapped a four-day losing streak for the benchmark index, which still posted its fourth losing week in the last five. The Dow Jones Industrial Average rose 1 percent to 31,097.26 while the tech-heavy Nasdaq climbed 0.9 percent to 11,127.85. The S&P 500 closed out its worst quarter since the onset of the pandemic in early 2020. Its performance in the first half of 2022 was the worst since the first six months of 1970. It has been in a bear market since last month, meaning an extended decline of 20 percent or more from its most recent peak. The yield on the 10-year Treasury, which helps set mortgage rates, was steady at 2.89 percent after falling last Friday from last Thursday’s 2.97 percent. Also on Monday, the benchmark US crude oil lost 67 cents to $107.76 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $2.67 to $108.43 a barrel last Friday. Brent crude, the pricing basis for international trading, shed 52 cents to $111.11 a barrel. The US dollar rose to 135.41 Japanese yen from 135.27 yen, while the euro climbed to $1.0440 from $1.0429.