Worries about Economic Recovery Weigh on Global Stocks

Highlights:

• USA
  All the three Wall Street stock exchanges posted historical gains. The Dow Jones rose by 0.68%, to 35,061.55. The S&P 500 surged by 1.01% to 4,411,79. Meanwhile, the Nasdaq gained 1.04% to 14,836.99. 
• ASIA
  Nikkei climbed by 1.77%. Kospi closed with a loss of 0.91% disturbed by the new wave of Covid-19 infections.
  The Hang Seng plunged by 4.13% due to strong sell-off of Chinese companies.
• EUROPE
  The Stoxx 600 index dropped by 0.5%.

Wall Street Closed at Record Highs

Wall Street stocks closed with solid advances on Friday. The Dow Jones registered a historical record with a rise of 0.68% or 238.20 points to 35,061.55. The selective S&P 500 also reached its record surging by 1.01% or 44.33 units, to 4,411, 79. 

The Nasdaq composite index gained 1.04% or 152.39 points and ended at 14,836.99. 

Investors left behind the worries of Covid-19 advances and high inflation figures.  

Wall Street was also supported by the excellent business results of influential technology companies. Snap and Twitter published better than expected results, lifting other social media giants such as Facebook. Twitter advanced by 3%, and Snap surged by 23.8%. At the same time, Facebook gained 5.3%.

Microsoft, Apple, Facebook and Alphabet will present their reports this week.

Other sectors also helped the market. 

Telecommunications showed the highest gains rising by 2.65%. Public services followed it, adding 1.28%. Essential consumer goods increased by 1.22%, and health added 1.18%. Meanwhile, only the energy sector recorded losses yielding 0.43%.

Among the thirty Dow Jones stocks, Visa led earnings and surged by 2.02%. Home Depot increased by a solid 1.95%, and McDonald’s gained 1.75%. 

On the other hand, Intel slipped by 5,29% and posted the most significant losses. Honeywell followed it with a drop of 1.47%. Dow lost 0.68%, and JP Morgan Chase yielded 0.15%.

 What will the future bring?

The 10-year Treasury yields gave up their gains on Friday following a report from IHS Markit, showing that manufacturing growth unexpectedly hastened in July. 

The economy continues to recover at a hasty pace. Now the question is how much growth will slow in the following months and years. According to Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, opinions differ about what the future brings. 

Market participants now look forward to this week’s Fed meeting on monetary policy. 

Nikkei Closed in Green, but Virus Worries Held Back the Rise

Japanese stocks closed Monday with gains following a rally in other countries amid solid corporate reports. Still, gains were dampened by concerns that the spread of the coronavirus in the country could further slow down the economic recovery.

In early trading, the Nikkei climbed by 1.77% after a four-day weekend that marked the opening of the Tokyo Olympics. Then it shed some profits and closed 1.04% higher at 27.833.29.

The broader Topix index closed with a rise of 1.11% at 1,925.62.

Steel corporation Tokyo Steel Manufacturing jumped by 9.3% after sharply raising its earnings forecast.

Ferrous metals, textiles and shipping led the gains. The textile giant Fast Retailing, an owner of the clothing chain Uniqlo, closed 0.91% higher. 

Nippon Steel and Sumitomo Metal advanced a significant 3.69%. Meanwhile, the logistics and tourism group ANA Holdings enjoyed a 2.18% rise.

Toyota Motor improved its valuation today, adding 1.06%. Its competitor, Nissan Motor, gained 0.75%.

Shares of SoftBank Group fell by 2.1% due to investors’ concerns about the group’s investments in the securities of China’s Didi and other representatives of the Chinese tech sector. Beijing is introducing stricter regulatory measures against them.

Kospi Falls by 0.91% Amid Increased Virus Worries

Inspired by the three major US stocks rising, Korean stocks opened at a high price on Monday. However, the opening price turned out to be the highest throughout the day. Institutional and foreign investors were once again net sellers. It emphasized the mistrust that the increase in COVID-19 infections worldwide has been generating and the possibility that the economic recovery will delay.

The number of newly diagnosed cases in South Korea exceeded 1,000. Investors were optimistic about the financial reports of US companies. On the other hand, the Shanghai stocks had their worst situation in a year, hitting the spirit of Korean stocks. The Hong Kong Stock Market decline hurt tech companies after the Chinese government announced new reform measures for the domestic giants in this sector.

The Korea Composite Stock Index closed with a loss of 0.91% or 29.47 points at 3,24.95. 

Meanwhile, the Kosdaq technology index fell by 0.75% or 7.87 points, to 1,047.63.

Tech giant Samsung Electronics, the largest capitalization asset on the Seoul Stock Exchange, lost 0.63%. At the same time, SK Hynix, the world’s second-largest memory chip maker, yielded 1.27%.

In the biopharmaceutical sector, Samsung Biologics added 0.11%. However, its competitor Celltrion lost 1.68%.

Naver, the largest South Korean internet search engine, closed flat. Kakao, the most popular messaging app in the country, slipped by 1.34%.

Meanwhile, Hyundai Motor decreased by 0.44%.

Tech Sell-off Leaves Hang Seng with Losses

After China tightened regulations against private education companies, a big sell-off in Chinese technology companies hit the Hong Kong Stock Exchange.

The Hang Seng plunged by 4.13%, or 1,129.66, to 26,192.32. 

Meituan sank by 13,76% and became the third worst company on the market for the day. It was only behind the restaurant chain Haidilao which plunged by 16.69%, and CG Services yielding 16.60%.

All the sub-indices closed in red except Services which added 1.12%. Real Estate dropped by 3.02%, Finance lost 2.03%, and Commerce and Industry slipped by 5.98%.

Meanwhile, the Hang Seng China Enterprises fell by 4.92%.

Tencent, the primary benchmark in the market, lost 7.72%, and the e-commerce giant Alibaba fell by 6.38%.

Several Hong Kong companies closed the day in green. MTR Corporation increased by 0.65%). Meanwhile, Hang Seng Bank gained 0.80%, and CLP Holdings hiked by 1.72%.

Most Chinese state securities ended the day with losses. Petrochina slid by 2.13%, and Sinopec lost 2.74%.

The trading volume reached 268,250 million Hong Kong dollars.

European Stocks Open Weaker

European markets weakened at the beginning of the trading session on Monday, following the Asia Pacific markets’ correction trend.

The Stoxx 600 index dropped by 0.5%. The auto sector index slipped by 1.4% to lead the correction for all sectoral stock indexes. Meanwhile, the basic commodities sector index was the only positive, with a 0.8% gain. 

Germany’s DAX index lost 0.52% or 82 points to 15,587.27. At the same time, France’s CAC yielded 0.51% or 33.7 points to 6,535.12. The FTSE Index lost 0.43% or 30 points to 6,997.6. 

Investors continue to monitor the rise in Covid-19 cases in the Eurozone following the spread of the Delta variant. It has triggered restrictions again in several countries. Germany will release a survey of expectations and business climate as of July.