World shares mixed as focus turns to world elections
World shares were mixed on Monday as investors turned their attention to global politics and evaluated weekend election results from Germany and New Zealand.
KEEPING SCORE: European shares were uneven in early trading. Germany’s DAX rose 0.1 percent to 12,605.41 but France’s CAC 40 slipped 0.1 percent to 5,278.96. Britain’s FTSE 100 lost 0.2 percent to 7,295.00. Wall Street was poised to open lower. Dow futures slipped 0.1 percent to 22,276.00 and broader S&P 500 futures eased 0.1 percent to 2,495.70.
GERMAN POLITICS: Chancellor Angela Merkel won a fourth term but the big change was the nationalist, anti-refugee Alternative for Germany party surging into parliament with about 13 percent of the vote. Merkel’s party and its allies lost some seats as they turned in one of their weakest postwar results. The results sent the euro lower and underscored the tricky challenge Merkel has in forming a coalition with new partners to lead Europe’s biggest economy.
NEW ZEALAND VOTE: Prime Minister Bill English’s National Party won the most votes but failed to gain an outright majority and will need help from other political parties to form a government, pressuring the country’s currency. The coalition negotiations likely mean New Zealanders will need to wait weeks to know if English will retain the top job or if Labour Party leader Jacinda Ardern might prevail.
QUOTEWORTHY: “We have certainly seen a tough weekend for elections with both the German and New Zealand election providing some reasons to unnerve investors,” said Jingyi Pan, market strategist at IG in Singapore.
WEEK AHEAD: Politics also dominates the week’s events, with investors on edge ahead of a widely expected announcement by Japanese Prime Minister Shinzo Abe later Monday to call a snap general election for Oct. 22. Investors are also looking ahead to Chinese manufacturing data and Japanese retail sales, employment and other economic data at the end of the week, for insights on Asia’s two biggest economies.
ASIAN SCORECARD: Japan’s Nikkei 225 index rose 0.5 percent to close at 20,397.58 as the yen’s renewed strength made the country’s stocks more attractive to foreign investors. But South Korea’s Kospi lost 0.4 percent to 2,380.40, Hong Kong’s Hang Seng shed 1.4 percent to 27,500.34 and the Shanghai Composite in mainland China fell 0.3 percent to 3,341.55. Australia’s S&P/ASX 200 edged up less than 0.1 percent to 5,683.70. Taiwan’s benchmark fell and Southeast Asian indexes were mostly lower.
CURRENCIES: The dollar strengthened to 112.19 yen from 111.99 yen on Friday. The euro weakened to $1.1909 from $1.1947.
ENERGY: Oil futures were mixed. Benchmark U.S. crude fell 20 cents to $50.46 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 11 cents, or 0.2 percent, to settle at $50.66 a barrel on Friday. Brent crude, used to price international oils, added 10 cents to $56.52 a barrel in London.