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World Shares Mixed on S. Korea Deal 07/31 04:51
World shares were mixed Thursday after U.S. stocks slipped, as doubts rose
on Wall Street about whether the Federal Reserve will deliver economy-juicing
cuts to interest rates by September.
MANILA, Philippines (AP) -- World shares were mixed Thursday after U.S.
stocks slipped, as doubts rose on Wall Street about whether the Federal Reserve
will deliver economy-juicing cuts to interest rates by September.
In early European trading, Germany's DAX rose 0.5% to 24,395.19 while
Britain's FTSE 100 added 0.4% to 9,173.79. In Paris, the CAC 40 edged 0.3%
higher to 7,882.76.
The future for S&P 500 was 1.1% higher while that for the Dow Jones
Industrial Average rose 0.4%.
In Asian trading, Japan's Nikkei 225 rose 1.1% to 41,069.82 after the Bank
of Japan kept interest rates steady at 0.5% and raised its inflation
projections.
"Despite the recent U.S.-Japan tariff agreement, the BOJ will need to take
time to evaluate its impact on growth and inflation before adjusting its policy
rate, especially given fiscal policy uncertainty. Thus, today's pause came as
no surprise," ING Bank said in a commentary.
"In our view, the BOJ has eased its concerns about trade uncertainty and
will now focus on the inflation mandate instead of risk management," it added.
In Seoul, the Kospi edged down 0.3% to 3,245.44 after South Korea reached a
15% tariff deal with the U.S., with no levies on American goods like cars,
trucks and farm products. The deal also includes South Korea's purchase of $100
billion in U.S. gas and oil and $350 billion worth of investments in the U.S.
Hong Kong's Hang Seng index fell 1.5% to 24,803.18, while the Shanghai
Composite Index slid 1.2% to 3,573.21. Australia's S&P ASX 200 shed 0.2% to
8,742.80. India's BSE Sensex rose 0.2% to 81,642.81. Taiwan's TAIEX added 0.3%
to 23,542.52.
China's manufacturing activity was weaker than expected in July, with data
on Thursday showing the official manufacturing purchasing managers' index PMI
slowed to 49.3, down from 49.7.
RaboBank, citing U.S. trade deals with other countries including Bangladesh,
said in a commentary that "it appears to be only a matter of time before India
agrees to terms to ensure that it retains favorable access to the U.S. market
and all of those other markets that (U.S. President Donald) Trump has
demonstrated he has the power to direct through economic coercion."
The terms of a U.S.-India trade deal would almost certainly include Indian
purchases of U.S. arms and energy products and preferential access to U.S.
agricultural goods, it said.
"A potential loser in all of this is Australia. With the U.S. sending more
wheat to Indonesia and Bangladesh and more LNG to Japan and South Korea,
Australian exports stand to be displaced from their traditional markets," it
added.
Trump on Wednesday announced the U.S. will impose a 25% tariff on imports
from India, along with an additional tax because of India's purchases of
Russian oil, beginning Friday. That's when stiff tariffs Trump has proposed for
many other countries are also scheduled to kick in, unless they reach trade
deals that lower the rates. But the U.S. president said the two countries were
still in negotiations.
On Wall Street on Wednesday the S&P 500 edged down by 0.1%, coming off its
first loss after setting all-time highs for six successive days. The Dow Jones
Industrial Average dropped 0.4% and the Nasdaq composite rose 0.1%.
Stocks felt pressure from rising Treasury yields after the Federal Reserve
voted to hold its main interest rate steady. The move may upset Trump, who has
been lobbying for lower interest rates, but it was widely expected on Wall
Street.
Lower rates would give the job market and overall economy a boost, but it
could also risk fueling inflation when Trump's tariffs may be set to raise
prices for U.S. consumers. The Fed's job is to keep both the job market and
inflation in a good place.
In other dealings on Thursday, U.S. benchmark crude oil lost 10 cents to
$69.90 per barrel, while Brent crude, the international standard, shed 23 cents
to $72.24 per barrel.
The U.S. dollar rose to 149.66 Japanese yen from 149.51 yen. The euro rose
to $1.1442 from $1.1404.
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