Gold surges, stocks mixed amid US-China feud, pandemic
Published 11:52 am Monday, July 27, 2020
By JOE McDONALD
AP Business Writer
BEIJING (AP) — Global stock markets were mixed and the price of gold surged to a record on Monday amid U.S.-China tensions and concern that an economic recovery from the coronavirus pandemic might be weakening.
Major indexes in London, Tokyo and Hong Kong declined while Frankfurt and Shanghai edged up. U.S. stock futures were slightly higher ahead of the open.
Wall Street ended last week down after a new diplomatic flare-up between the U.S. and Chinese governments and mixed company earnings reports.
Global markets have regained most of this year’s losses but forecasters warn the rebound might have been too big and too early as virus case numbers rise in the United States and some other economies.
Weak stock prices “speak volumes of soured risk appetite amid escalating U.S.-China risks, worsening virus outbreaks and a flagging recovery,” said Hayaki Narita of Mizuho Bank in a report.
In Europe, the FTSE 100 in London declined 0.2% to 6,109 while the DAX in Frankfurt advanced 0.2% to 12,862. The CAC 40 in France was off 0.3% at 4,941. Shares in travel and tourism companies were down particularly hard after some countries put quarantine restrictions on travelers from Spain, where contagions have been on the rise again.
Gold jumped $40.60 to a record $1,938.10 per ounce in a sign investors were looking for safe havens to park money.
On Wall Street, futures for the benchmark S&P 500 index and the Dow Jones Industrial Average were up 0.3% and 0.4%, respectively.
In Asia, the Shanghai Composite Index rose 0.3% to close at 3,205.23 after swinging between gains and losses. The Nikkei 225 in Tokyo lost 0.2% to 22,715.85 while the Hang Seng in Hong Kong retreated 0.4% to 24,603.26.
The Kospi in Seoul advanced 0.8% to 2,217.86 and Australia’s S&P-ASX 200 gained 0.3% to 6,044.20. India’s Sensex lost 0.2% to 38,047.55. New Zealand and Singapore declined while Jakarta rose.
Investors were rattled by the latest U.S.-Chinese diplomatic feud. The Trump administration told Beijing last week to close its consulate in Houston. China responded by ordering the closure of the U.S. consulate in the southwestern city of Chengdu.
That adds to strains over trade, technology, Hong Kong and human rights that have sent relations between the two biggest global economies plunging to their lowest level in decades.
Investors also are worried about a rise in U.S. layoffs as spiking coronavirus infections cause more businesses to shut down. Extra unemployment benefits expire this week. Congress has yet to agree on more economic aid.
In energy markets, benchmark U.S. crude rose 10 cents to $41.39 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 22 cents on Friday to settle at $41.29. Brent crude, used to price international oils, rose 53 cents to $43.87 per barrel in London.
The dollar declined to 105.26 yen from Friday’s 105.97. The euro declined to $1.1729 from $1.1766.