World Shares Fall on Thursday 07/16 06:00
(AP) -- Shares retreated in Europe and Asia on Thursday as investors sold on
worries Beijing might cut back on stimulus after China's economy returned to
growth in the last quarter.
The Shanghai Composite index led Thursday's declines, dropping 4.5% to
3,210.10. Benchmarks also fell in Tokyo, Hong Kong and Sydney.
News that China's economy grew 3.2% in annual terms in April-June, after a
6.8% contraction in the previous quarter, failed to keep an overnight rally
The expansion came as anti-virus lockdowns were lifted and factories and
stores reopened. But it still was the weakest positive figure since China
started reporting quarterly growth in the early 1990s.
Weak retail sales showed that boosting factory output is the easy part, said
Stephen Innes of AxiCorp.
"No matter how much stimulus and fiscal sugar you try to entice consumers
with, they will not leave their apartment and go on a spending spree until they
feel confident the landscape is virus-free," he said in a report.
The improved growth data was expected and provided an opportunity to cash in
on profits from the recent run up in prices, analysts said.
Germany's DAX skidded 0.7% to 12,836.17 while the CAC 40 in Paris also shed
0.7%, to 5,056.88. Britain's FTSE 100 lost 0.8% to 6,244.06. New York looked
set for a retreat, with the future contract for the S&P 500 down 0.7% while the
contract for the Dow industrials declined 08%.
In Asian trading, Tokyo's Nikkei 225 lost 0.8% to 22,770.36, while the Hang
Seng in Hong Kong fell 2% to 24,970.69. In South Korea, the Kospi shed 0.8% to
In Australia, the S&P/ASX 200 fell 0.7% to 6,010.90, as authorities reported
that Victoria state had confirmed a record 317 new coronavirus cases in a day.
The Victoria government responded be reducing numbers of non-urgent
surgeries allowed in hospitals to increase beds available for COVID-19
patients, Health Minister Jenny Mikakos said.
Shares had advanced worldwide on Wednesday after researchers announced that
a vaccine developed by the National Institutes of Health and Moderna had revved
up people's immune systems in early testing, as hoped.
But rising numbers of infections and deaths from the COVID-19 pandemic
remain a constant source of uncertainty.
Worries also remain high that the stock market has gone overboard in its
rally: It has taken less than four months for the S&P 500 to almost return to
its record after being down nearly 34%. But it could take years for the economy
and corporate profits to get back to where they were before the pandemic struck.
A raft of troubling news, from the more than 13.5 million confirmed cases of
COVID-19 to escalating friction between Washington and Beijing, hangs over the
markets but has been countered by the massive amounts of stimulus poured into
financial systems by central banks to counter the pandemic downturn.
"In most other realities, this would be ironic or absurd. But in the
liquidity inundated post-COVID world markets, this is Thursday," Mizuho Bank's
Riki Ogawa said in a commentary.
The yield on the 10-year Treasury slipped to 0.62% from 0.63% late
Wednesday. It tends to move with investors' expectations for the economy and
In other trading, benchmark U.S. crude oil shed 32 cents to $40.88 per
barrel in electronic trading on the New York Mercantile Exchange. It rose 91
cents to settle at $41.20 per barrel on Wednesday.
Brent oil, the international standard, gave up 24 cents to $43.55 per
barrel. It picked up 89 cents to settle at $43.79 per barrel overnight.
The dollar bought 106.90 Japanese yen, down from 106.96 yen late Wednesday.
The euro was trading at $1.1404, weakening from $1.1411.