Global shares mostly higher as investors eye 2Q earnings

TOKYO—   Shares were mostly higher in Europe and Asia on Monday as investors awaited a fresh flurry of corporate earnings reports. Chinese markets shrugged off weaker manufacturing data, while Japan’s Nikkei index sagged as the yen surged against the dollar.

KEEPING SCORE: Germany’s DAX gained 0.1 per cent to 12,179.72 and the CAC 40 of France added 0.1 per cent to 5,137.39. Britain’s FTSE 100 gained 0.5 per cent to 7,403.30. Dow futures gained 0.2 per cent to 21,823.00 and S&P 500 futures edged 0.1 per cent higher to 2,472.70, auguring an upbeat start for the week on Wall Street.

ASIA’S DAY: Japan’s Nikkei 225 index slipped 0.2 per cent to 19,925.18 and the Kospi in South Korea was flat at 2,402.71. Hong Kong’s Hang Seng index jumped 1.3 per cent to 27,323.99 and the Shanghai Composite index climbed 0.6 per cent to 3,273.03. The S&P ASX 200 of Australia gained 0.3 per cent to 5,720.60 and India’s Sensex added 0.6 per cent to 32,485.48. Shares in Southeast Asia were mostly lower.

EARNINGS WATCH: Some 350 companies were due to release second quarter earnings on Monday just in Japan, and investors are watching for more upbeat reports following earlier strong results in the region, as well as in the U.S. Results from a little more than half of the companies in the S&P 500 have been mostly encouraging.

ANALYST COMMENT: “With 57 per cent of the companies on the comprehensive S&P 500 index reported so far, it is unavoidable for us to discuss earnings performances. On a broad level we have seen both sales and earnings surprise largely match up to the strong Q1 performance, keeping the markets going,” Jingyi Pan of IG said in a commentary. “The new week brings another one-fourth of the companies on the S&P 500 index which could see the focus slightly moderate and shift toward earnings here in Asia instead.”

NORTH KOREA: The United States flew two supersonic bombers over the Korean Peninsula on Sunday in a show of force against North Korea following an intercontinental ballistic missile test late Friday. The U.S. also said it conducted a successful test of a missile defence system located in Alaska. Japan’s Prime Minister Shinzo Abe said spoke with President Donald Trump and agreed to take further action against North Korea. Abe said Japan would join with the U.S. in pursuing concrete steps to fortify its defence system and capabilities and do its utmost to safeguard national security. Tensions over North Korea helped push the Japanese yen, viewed as a “safe haven” currency, sharply higher against the U.S. dollar, hurting exporters’ shares.

CHINA FACTORY DATA: A manufacturing survey showed Chinese factory activity eased in July as demand for exports weakened. The monthly purchasing managers’ index released Monday slipped to 51.4 last month from 51.7 in the previous month. The reading is based on a 100-point scale on which numbers above 50 indicate expansion. It was still the 12th straight month that factories reported expansion, according to the data compiled by the Federation of Logistics & Purchasing posted on China’s official statistics website.

ENERGY: The price of oil fell back after capping its best week since early December last week, when it gained 9 per cent. Benchmark U.S. crude lost 10 cents to $49.61 per barrel in electronic trading on the New York Mercantile Exchange. It climbed 67 cents Friday to settle at $49.71 per barrel and touched its highest level since May. Brent crude, the international standard, added gave up 6 cents 23 cents to $52.16 per barrel.

CURRENCIES: The dollar fell to 110.63 Japanese yen from 110.67 yen on Friday. The euro slipped to $1.1729 from $1.1756, and the British pound dropped to $1.3109 from $1.3135.