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Global shares fall as Covid-19 pandemic fears overshadow aid hopes

Global shares and US futures were mostly lower Monday

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AP | PTI  |  Tokyo 

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Global shares and U.S. futures were mostly lower Monday as hopes for more U.S. economic aid were countered by fears over spreading damage from the pandemic.

France's CAC 40 slipped 0.5 per cent in early trading to 5,677.99, while Germany's DAX slipped 0.8 per cent to 13,943.02.

Britain's FTSE 100 shed 0.4 per cent to 6,843.12. U.S. shares were poised for a weak start with Dow futures down nearly 0.7 per cent at 30,793.00. S&P 500 futures fell 0.6 per cent to 3,794.00.

Traders continued to be cheered by prospects that the incoming administration of President-elect Joe Biden will pump more aid into the U.S. economy, a move that will help Asia and other export-driven nations.

But that optimism is tempered by worries over the potential for further disruptions on the political front before Biden takes office on January 20, following last weeks riots at the U.S. Capitol.

Biden may also struggle to win support for his pledges of much more financial support for individuals and businesses, despite the Democrats' control of both houses of the Congress with senatorial wins last week in runoff elections in Georgia.

At the same time, the economic outlook is darkening. The Labor Department said Friday employers cut jobs for the first time since April as the worsening pandemic led more businesses to shut down.

It was a much worse reading than the modest growth that economists were expecting to see. Such pressure is rising on economies around the world as the pandemic accelerates.

South Korea's Kospi lost 0.1 per cent to 3,148.45, shedding earlier gains. Australia's S&P/ASX 200 lost 0.9 per cent to 6,697.20. Hong Kong's Hang Seng edged 0.1 per cent higher to 27,908.22, while the Shanghai Composite dipped 1.1 per cent to 3,531.50.

Japanese were closed for a national holiday. Adding to concerns over surging numbers of coronavirus infections, another new variant of the virus was reported over the weekend among several people who had arrived from Brazil.

Japanese Prime Minister Yoshihide Suga has taken care to spare the worlds third largest economy as much as possible from risks of sinking further, even as coronavirus cases have surged recently.

Sugas declaration of a state of emergency for the Tokyo area, which kicked in Friday, focuses on asking restaurants to close at 8 p.m.

Critics fear thats not enough, and Sugas support ratings are sinking. Cries for his ouster are likely to grow if the upward curb in infections doesnt flatten in a month, as he has promised.

Hopes are high for rollouts of coronavirus vaccines. But the reports of new versions of the virus are setting off new worries, as some experts believe more studies are needed to see if available vaccines will be effective in curbing those versions of the virus.

In energy trading, benchmark U.S. crude fell 33 cents to USD 51.91 a barrel in electronic trading on the New York Mercantile Exchange. It gained USD 1.41 to USD 52.24 per barrel on Friday. Brent crude, the standard, shed 53 cents to USD 55.46 a barrel.

In currency trading, the U.S. dollar edged up to 104.06 Japanese yen from 103.95. The euro cost USD 1.2197, down from USD 1.2220.

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First Published: Mon, January 11 2021. 15:47 IST