World shares mixed as investors eye U.S. economic aid talks
Tokyo: European shares fell Wednesday after Asian shares advanced as investors welcomed a batch of solid earnings reports from U.S. companies.
France’s CAC 40 slipped 0.9% to 4,884.46 while Germany’s DAX shed 0.8% to 12,635.78. Britain’s FTSE 100 dipped 1.3% to 5,811.52. U.S. shares were set to drift lower with Dow futures giving up 0.1% to 28,144.00. S&P 500 futures also declined 0.1%, to 3,428.12.
The U.K. government reported Wednesday that its borrowing rose to the highest level on record in the first half of the financial year as tax revenue fell and authorities spent billions of pounds to prop up an economy ravaged by the coronavirus pandemic.
The Office for National Statistics said the public sector’s net debt now stands at 103.5% of the U.K.’s annual economic output, the highest level since 1960.
Overnight gains on Wall Street again helped lift shares in Asia.
Japan’s benchmark Nikkei 225 gained 0.3% to finish at 23,639.46. South Korea’s Kospi added 0.5% to 2,370.86, while Australia’s S&P/ASX 200 edged up 0.1% to 6,191.80. Hong Kong’s Hang Seng jumped 0.8% to 24,754.42. The Shanghai Composite slipped nearly 0.1% to 3,325.02.
Shares fell in India and rose in Taiwan.
Investors are nursing hopes that Democrats and Republicans will reach a deal to deliver more aid for the economy.
Negotiations on a huge COVID-19 relief bill took a modest step forward on Tuesday, though time is running out and Senate Majority Leader Mitch McConnell, President Donald Trump’s most powerful Senate ally, was pressing the White House not to move ahead.
The office of Democratic House Speaker Nancy Pelosi said talks with Treasury Secretary Steven Mnuchin were productive, but other veteran lawmakers said there is still too much work to do and not enough time to enact a relief bill by the Nov. 3 Election Day.
Regardless of staunch opposition to stimulus from Republican leaders, Jeffrey Halley of Oanda said, the one lesson we can take is that the U.S. fiscal stimulus package remains the only thing financial markets are concentrating on, to the exclusion of everything else.” As ever, the main risk is headline risk, either from stimulus negotiations or the Presidential Twitter account,” Halley said.
Stocks have been mostly pushing higher this month after giving back some of their big gains this year in a sudden September swoon. The benchmark S&P 500 has notched a gain in each of the past three weeks.
The Big Tech stocks have been investor favorites this year, because the companies are expected to do well during and after the pandemic. That these companies could one day face the risk of an antitrust case is a risk investors have, or should have, long considered.
In energy trading, U.S. benchmark crude fell 63 cents to 41.07 a barrel in electronic trading on the New York Mercantile Exchange. On Tuesday, it gained 63 cents to 41.70 per barrel. Brent crude, the international standard, lost 69 cents to 42.47 a barrel.
The U.S. dollar declined to 104.92 Japanese yen from 105.47 yen late Tuesday. The euro cost 1.1863, up from 1.1823.
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