Global stocks pick up as investors watch data, Fed
Published 12:04 pm Wednesday, September 23, 2020
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By ELAINE KURTENBACH
AP Business Writer
World stocks mostly rose on Wednesday as investors digested new data showing Europe’s economic recovery may be slowing and looked ahead to a testimony by the Federal Reserve’s chairman.
Surveys of purchasing managers by IHS Markit indicated business activity slowed in the region using the euro. Signs of strength in manufacturing were countered by weakness in the service sector, especially in places where coronavirus outbreaks are flaring, the report said.
The preliminary or “flash” composite purchasing managers index for the eurozone was at a three-month low of 50.1 points in September on a scale of 1 to 100 where 50 marks the break between expansion and contraction.
However, the flash manufacturing PMI was at 53.7, a 25-month high, it said.
Britain’s FTSE 100 gained 2.1% to 5,953, while the DAX in Germany added 1.4% to 12,774. In Paris, the CAC 40 advanced 1.6% to 4,847. U.S. futures also augured gains for Wall Street. The future contract for the S&P 500 was up 0.3% while the future for the Dow industrials added 0.7%.
Investors are keeping a wary eye on how the coronavirus pandemic is affecting the economic outlook in the U.S. as well after the Federal Reserve chairman urged Congress to provide fresh stimulus for the U.S. economy.
At a House of Representatives committee hearing Tuesday, Powell said the economy appears to be improving, but some areas appear to be slowing after the expiration of extra weekly unemployment benefits and other stimulus that Congress approved in March. He will testify for a second of three days on Wednesday.
“Even as Fed Powell has sounded caution about the strength and steadiness of a recovery — contingent on ‘keeping the virus under control’ — the wider Fed positioning is not one of unbridled pipeline stimulus. And this may limit follow-through rallies in asset markets,” Mizuho Bank said in a commentary.
Tokyo’s Nikkei 225 trimmed early losses, closing 0.1% lower at 23,346.49 after trading resumed following a four-day weekend. The Hang Seng in Hong Kong edged 0.1% higher to 23,742.51. South Korea’s Kospi was almost unchanged at 2,333.24.
India’s Sensex gave up early gains to drop 0.8%, to 37,428.46, while the Shanghai Composite index added 0.2% to 3,279.71.
Australia’s S&P/ASX 200 rose 2.4% to 5,923.90 after the government said retail sales fell 4.2% from the month before in August, much less than the 11% forecast, Marcel Thieliant of Capital Economics said in a commentary.
Among other concerns for investors are rising tensions between the United States and China, which could lead to a Chinese retaliation against U.S tech companies.
Tensions flared Tuesday as President Donald Trump, in a very short virtual speech, urged the United Nations to hold Beijing “accountable” for failing to contain the virus that originated in the Chinese city of Wuhan and has killed over 200,000 Americans and nearly 1 million worldwide.
China’s ambassador rejected all accusations against Beijing as “totally baseless.”
U.S. benchmark crude gave up 8 cents to $39.72 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude gained 5 cents to $41.77 per barrel.
The dollar rose to 105.13 Japanese yen from 104.93 yen late Tuesday. The euro weakened to $1.1690 from $1.1710.
