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World Shares Gain Monday 07/27 04:59
World shares were mostly higher Monday and oil prices slipped nearly 7% as
the U.S. and Iran refrained from fighting while discussing a possible
resumption of negotiations on an interim ceasefire deal.
BANGKOK (AP) -- World shares were mostly higher Monday and oil prices
slipped nearly 7% as the U.S. and Iran refrained from fighting while discussing
a possible resumption of negotiations on an interim ceasefire deal.
Shares in Chinese memory chipmaker CXMT soared 466% as they began trading on
Shanghai's technology board. The company jumped to become China's most valuable
listed company with an estimated market capitalization of 3.3 trillion yuan
(nearly $490 billion).
The Pentagon did not respond to questions about the pause in attacks on
Iranian coastal areas and infrastructure after nearly two weeks of escalating
fighting sparked by Iran's firing at ships trying to transit the Strait of
Hormuz.
But markets reacted with relief. U.S. futures surged early Monday and the
price of a barrel of Brent crude, the international standard, dropped 6.8% to
$85.49.
U.S. benchmark crude dropped 7% to $83.06 per barrel.
"Oil's sharp retreat at the Monday open did more than knock a few dollars
off the barrel. It loosened the geopolitical knot that had been tightening
around equities, currencies, bonds and central banks for most of July," Stephen
Innes of SPI Asset Management said in a commentary.
In early European trading, Germany's DAX gained 1.6% to 25,497,42 and the
CAC 40 in Paris was up 0.8% at 8,436.94. Britain's FTSE 100 rose 0.5% to
10,784.00.
The futures for the S&P 500 and Dow Jones Industrial Average were up 1%.
In Asian trading, Japan's benchmark Nikkei 225 rose 0.5% to 64,931.19, while
the Kospi in South Korea advanced 1% to 6,755.75.
Hong Kong's Hang Seng climbed 1% to 25,207.18, while the Shanghai Composite
index gained 1.2% to 3,858.25.
In Australia, the S&P/ASX 200 surged 1.4% to 8,894.00.
Taiwan's Taiex slipped 0.1% and the Sensex in India added 1.1%.
On Friday, the S&P 500 barely budged, picking up less than 0.1% and notching
its second straight losing week for the first time since March.
The Dow industrials rose 0.5%. The Nasdaq composite index slipped 0.6%,
weighed down by sharp losses for heavyweights like Micron Technology, which
fell 7%, and Broadcom, which lost 2.7%.
Recent surges in energy prices and fresh tariffs announced last week by the
administration of U.S. President Donald Trump could result in hotter inflation,
which has been squeezing consumers and looming over the Federal Reserve's
interest rate policy.
The Fed meets this week, though rising inflation has dashed hopes for an
interest-rate cut anytime soon. Wall Street has been leaning toward a potential
rate hike to tamp down higher prices.
Higher energy costs are taking up a bigger share of household budgets, which
have shifted toward more basic needs, like gasoline. Nationally, a gallon of
gasoline costs $4.11 per gallon, according to AAA. That is still lower than
this spring as the conflict in Iran expanded, but almost a dollar higher than
last year at this time.
"Oil is the fastest-moving tax in the global economy. When crude rises
sharply, consumers feel it at the fuel pump, airlines and transport companies
feel it in their operating costs, manufacturers feel it in their logistics, and
central banks begin worrying that the initial supply shock will spill over into
broader inflation expectations," Innes said.
Meanwhile, corporate earnings reports are focusing attention on the
sustainability of broader profits from a boom in spending on artificial
intelligence. Tech giants like Alphabet and Nvidia have been spending heavily
to expand AI capacity and investors increasingly are questioning whether they
will generate profits to justify the massive stock values that have pushed
markets market higher throughout the year.
In other dealings early Monday, the U.S. dollar slipped to 163.56 Japanese
yen from 163.64 yen. The euro rose to $1.1399 from $1.1398.
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