Global Stocks Mixed after Wall Street Record

Highlights:

• • USA
    Wall Street reached a new record with the Dow Jones increasing by 0.24% or 82.76 points; S&P 500 adding 0.24% or 10.51 units, and the Nasdaq gaining 0.03% or 3.72 points.
  • ASIA
    Nikkei followed Wall Street and gained 0.49% to 27,970.22 points. The Kospi registered a rise of 0.24%. The Hang Seng collapsed by 4.22% or 1,105.89 points due to a sell-off in technology.
  • EUROPE
    The Stoxx 600 index lost 0.6% after the plunge of Chinese stocks.

Wall Street Set New All-time Highs

Wall Street closed with records on Monday, ahead of the quarterly results of large technology companies and the Fed meeting.

The Dow Jones increased by 0.24% or 82.76 points, to 35,144.31. The selective S&P 500 also grew by 0.24% or 10.51 units, to 4,422.30.

Meanwhile, the Nasdaq market composite index added a slight 0.03% or 3.72 points and ended at 14,840.71.

The session on Wall Street started in the red. However, at the end of the session, stock markets posted their second consecutive day of records. Meanwhile, investors were more concerned about technology results than the coronavirus pandemic. 

Big Tech earnings reports in focus

The electric car giant Tesla published its results after the stock market closed. So we will see the market reaction tomorrow. Big Tech such as Apple, Alphabet, Microsoft, Facebook, and Amazon will follow in the coming days.

So far, 88% of the companies that have reported their results had positive earnings per share. FactSet expects that it will be the highest percentage since 2008.

By sectors, energy made the most significant advanced adding 2.5%. It was followed by basic materials with a rise of 0.88%. At the same time, non-essential goods gained 0.77%.

The sanitation sector was the biggest loser of the day, dropping 0.62%. Technology companies remained almost unchanged, losing 0.02%.

The market looks forward to the Federal Open Market Committee meeting to be held between Tuesday and Wednesday. It will give clues about a possible withdrawal of stimulus and the central bank’s economic perspectives.

Among the 30 companies listed on the Dow Jones, the most notable gain was for Dow Inc surging by 3.16%. Intel followed it with a rise of 2.47%. Meanwhile, Chevron hiked by 2.11%, and Boeing gained 1.95%.

As for the losers, Amgen lost 1.07%, UnitedHealth yielded 1%, Nike shed 0.76%, and Home Depot declined by 0.50%.

Nikkei follows the Wall Street advance

Japanese stocks rallied on Tuesday following Wall Street’s rally. However, the Nikkei 225 failed to close above the psychologically important level of 28,000 in its second session in a row.

During trading, the Nikkei briefly exceeded this level. Still, it lost its advantage towards the end of the session due to investor caution ahead of the US Fed meeting. 

Nikkei rose by 0.49% to 27,970.22 points. The broader Topix Index added 0.64% to 1.938.04 points. 

The rally was led by shares of Sumitomo Metal Mining Co surging by 4.49%, Nippon Suisan Kaisha, which added 3.96% and ANA Holdings Inc, gaining 3.3%.

Masahiro Ichikawa of Sumitomo Mitsui DS Asset Management stated that Strong Wall Street earnings made investors believe that the US is recovering. This news, in turn, is beneficial for the Japanese economy. Still, he added that investors are holding onto a wait-and-see attitude before they rise to the 28,000 level.

The steelmaker Nippon Steel and Sumitomo Metal advanced by 3.69%.

The textile giant Fast Retailing, the owner of the clothing chain Uniqlo, added 0.21%. At the same time, Toyota Motor, the world’s largest producer of vehicles, increased by 0.42%.

Nintendo, the Japanese multinational video games company, improved by 0.51%.

The trading volume amounted to 1,997 trillion yen.

Good corporate results push Seoul up

The Seoul Stock Exchange increased today thanks to the good outlook on the business results of South Korean companies. The Kospi registered a rise of 0.24% or 7.58 points to close at 3,232.53. Meanwhile, the Kosdaq technology index dropped by 1.08 points or 0.1% to 1,046.55.

In turn, the Bank of Korea presented data on the gross domestic product today. It expanded by 0.7% in April-June compared to the first quarter. Only the rise in COVID-19 infections globally prevented the rise in Kospi.

The top-valued token in Seoul, tech giant Samsung Electronics, lost 0.38%. Meanwhile, the world’s second-largest memory chip maker, SK Hynix, dropped by 0.85%. 

In contrast, in the biopharmaceutical sector, Samsung Biologics advanced by 1.57%. However, its competitor Celltrion lost 0.19%.

Naver closed flat, and Kakao increased by 0.34%.

Hyundai Motor, the largest South Korean automaker, enjoyed a rise of 0.22%. 

Hang Seng sank to November lows

The Hang Seng closed with losses of 4.22% or 1,105.89 points, to 25,086.43 today. It was mainly caused by the collapse in technology stocks.

The tightening of Beijing’s campaign against technology companies – officially, to better regulate the sector – has incited investors’ fears. They started to get rid of part of their positions in that sector to avoid risks.

Meanwhile, the Hang Seng China Enterprises slipped by 5.08%.

Among the sub-indices, only the services sector showed resistance and advanced by 1.17%. Meanwhile, the finance sector dropped by 1.54%; Real Estate lost 2.55%, and Commerce and Industry yielded 6.65%.

The digital giants experienced a real collapse in the session. Meituan plunged by 17.66%. Tencent followed it with an 8.98% decline. Meanwhile, Alibaba lost 6.35%.

The biggest loser of the session was Ali Health, the health services subsidiary for Alibaba. The company collapsed by 18.52%.

The reinforced campaign in Beijing caused Chinese securities indices to be valued at up to $570,000 million to be destroyed on Monday in both Hong Kong and New York.

Outside of the technology sector, there were also severe losses in real estate. CG Services slumped by 13.85%. In the finance sector, HKEX dropped by 6.56%.

The trading volume for the session was HK $360.67 billion.

The Chinese stock market dragged down European shares 

European stocks declined in early trading on Tuesday as Chinese stocks fell sharply. 

The Stoxx 600 index lost 0.6% to 458.57 and is on the way to its second day of decline. However, the stock market index is still a few points below its all-time high.

Worries about tightening regulations on the tech sector in China have sparked a sell-off in global markets this week. 

The German Dax slipped by 0.7%. France’s CAC 40 index dropped by 0.5%, and the UK’s FTSE 100 yielded 0.6%. 

Banks and automakers slid, while Miners Antofagasta and Glencore lost around 2%.

Industrial profits grew notably by 20% yearly in June. However, the growth was slower than the 36.4% in May. High commodity prices resumed squeezing the profitability of companies.

Rio Tinto declined 1.7%, and Reckitt Benckiser shares plunged by 8.5%.