Global shares mostly rise as Japan and other markets return to calm
Global shares traded mostly higher Tuesday, as the Tokyo benchmark bounced back and calmed after last week's plunge.
France's CAC 40 edged up nearly 0.2% in early trading to 7,263.55, while Germany's DAX rose 0.3% to 17,778.44. Britain's FTSE 100 fell 0.1% to 8,201.62. U.S. shares were set to drift higher with Dow futures rising 0.3% to 39,593.00. S&P 500 futures added 0.4% to 5,391.75.
In Asia, Japan's benchmark Nikkei 225 jumped 3.5% to finish at 36,232.51. Australia's S&P/ASX 200 rose nearly 0.2% to 7,826.80. South Korea's Kospi gained 0.1% to 2,621.50. Hong Kong's Hang Seng added 0.4% to 17,174.06, while the Shanghai Composite rose 0.3% to 2,867.95.
In Tokyo, computer chip issues were in demand, with Tokyo Electron surging 6.2%, echoing the strong performance of technology-related issues on Wall Street.
Investors also seemed to be cheered by how the yen's recent volatility appeared to be calming. Although a cheap yen is a boon for Japan's major exporters, like Toyota Motor Corp., by boosting the value of overseas earnings when translated into yen, a cheap currency erodes a nation's purchasing power.
The U.S. dollar rose to 147.74 yen from 147.17 yen. The euro cost $1.0925, down from $1.0935.
"Global geopolitical developments, such as tensions in East Asia, ongoing conflicts in Eastern Europe, or disruptions in global trade, could further impact the dollar's performance," said Luca Santos, currency analyst at ACY Securities.
Last week, Japanese stocks suffered their worst plunge since the Black Monday crash of 1987. A comment from a senior Bank of Japan official, stressing the importance of stability, helped calm markets somewhat.
Uncertainty around the world, including the situation in Ukraine and the Middle East, as well as worries about China, are adding to concerns that tend to set off market swings.
Wall Street drifted through a quiet day of trading Monday, with the S&P 500 ending little changed. Investors have their eyes on various data expected later this week, including reports on U.S. inflation and retail sales. The best-case scenario would be signs of a slowdown in inflation and strong sales.
Such data influences decisions by the world's central banks, including the Federal Reserve, which kept its main interest rate at a two-decade high trying to tackle what's known as "stagflation." The Fed could ease rates, giving the U.S. economy an upward push but threatening to worsen inflation.
Japan's central bank, in contrast, is trying to ignite inflation in a long deflation-stuck economy by gradually raising interest rates after years of zero or minus rates.
Japan's April-June real gross domestic product, or GDP, which measures the value of a nation's products and services, will be released Wednesday.
Some analysts say Japan's economic growth may be relatively robust, given the recent data on domestic capital investment.
"Actually now that energy and good prices have stabilized, you did see the first increase in real wages and real incomes in over two years in Japan," said Jesper Koll, a strategist and Japan expert who is now a director at Monex Group.
Several major U.S. companies report their earnings results later in the week, including Walmart and Home Depot. Most big U.S. companies have been reporting better profits than analysts expected.
In energy trading, benchmark U.S. crude fell 40 cents to $79.66 a barrel. Brent crude, the international standard, declined 42 cents to $81.88 a barrel.
Source: Associated Press
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