Global shares weaker as investors await data
Global stock markets were generally weaker yesterday as investors stayed on the sidelines before the release of a raft of economic data later this week. Britain’s FTSE 100 fell 0.3 percent in early trading to 7,523.33 and France’s CAC 40 was down 0.5 percent at 5,304.86. Germany’s DAX was almost unchanged at 12,624.74. Futures augured a tepid start on Wall Street after a long weekend. Dow futures dipped less than 0.1 percent while S&P futures fell 0.1 percent.
A raft of data being released this week will give investors fresh clues about the status of the global economy. Investors were awaiting the eurozone business and consumer confidence readings later in the day. Today, China’s latest official factory and service industry purchasing managers’ indexes will be released. The ISM index for US manufacturing due tomorrow and US private and official payroll numbers due Friday will give investors the latest clues on the health of the world’s largest economy. Analysts said upcoming economic data will also determine the direction of the US dollar, which has strengthened against the euro as it lost ground recently due to security concerns.
“The sustainability of the dollar’s rally will be tested this Friday night, with the non-farm payroll number in focus. A strong jobs report will likely firm up the Fed’s decision to trigger a second rate hike this year, and also reinforce investor confidence in the US economy,” said Margaret Yang, a market analyst at CMC Markets in Singapore.
Tokyo’s Nikkei 225 finished nearly flat at 19,677.85 and South Korea’s Kospi dropped 0.4 percent to 2,343.68. Australia’s S&P/ASX 200 added 0.2 percent to 5,717.90. Markets in Singapore, the Philippines, Indonesia and New Zealand were lower.
Markets in Shanghai, Hong Kong and Taipei were closed for a holiday. Most Asian markets fell in holiday-thinned trade yesterday, with dealers keeping tabs on a developing scandal around Donald Trump’s administration. The Washington Post said Friday that Trump’s son-in- law and close advisor Jared Kushner had met the Russian ambassador prior to the inauguration and proposed a secret communications link to the Kremlin. The talks, if confirmed, would raise new questions about the White House’s relationship with Moscow, which US intelligence agencies say could have helped the tycoon win November’s election.
There are fears the budding crisis, along with several other scandals enveloping the administration, could prevent Trump from pushing through his market-friendly economic policies. Okasan Online Securities said in a commentary: “With President Trump returning home from a trip abroad, media reporting on ‘Russiagate’ will also pick up.” Federal Reserve Bank of St. Louis chief James Bullard said Trump would have to start delivering on his promised agenda, which helped fan a surge in global markets in the months after the election.
“Washington does have to deliver at some point,” he told Bloomberg TV. “I think that is a concern going forward, whether the honeymoon period would end at some point and maybe the reality of American politics would settle in.” There were few catalysts to drive business, with Wall Street and London closed Monday for public holidays, while Hong Kong and Shanghai were closed yesterday. — Agencies