World shares mixed amid rising COVID, China-US tensions

World shares were mixed On July 16 as an increasing number of COVID-19 infections and strains between the China and U.S. weighed on sentiment.

Stocks declined in Tokyo, Shanghai, Seoul and Paris. However, London and Hong Kong witnessed gains. Additionally, U.S. futures increased.

As we know, the Biden administration was anticipated to soon issue a warning to U.S. companies about the risks of doing business in China. Remarkably, that is intensifying tensions between China and U.S., the two largest economies.

Meanwhile, a resurgence of COVID-19 infections across Asia and signs of recoveries elsewhere has added uncertainly over rebounds in the region.

According to Capital Economics, the virus situation across Southeast Asia became worse over the past couple of weeks. Indonesia, Thailand, Malaysia and Vietnam are all reporting a record-high number of daily infections rates. Moreover, Capital Economics added that although vaccine rollouts have accelerated in recent weeks, coverage across most of the region is still very low.

It also reported that the COVID situations have led governments to reimpose pandemic restrictions that will affect business activity and slow travel recovery.

In European trading, Germany’s DAX increased by 0.3% to 15,677.11. Meanwhile, the CAC 40 in Paris dropped 0.1% to 6,485.50. Britain’s FTSE 100 grew 0.3% to 7,037.05.

The Dow Jones Industrial Average futures surged 0.2%, while the S&P 500 gained 0.1%.

Tokyo reported a 6-month high number of new infections on Thursday

Tokyo’s Nikkei 225 index declined 1% to 28,003.08. In Seoul, the Kospi sank 0.3% to 3,276.91. The Shanghai Composite index slid 0.7% to 3,539.30. Hong Kong’s Hang Seng grew less than 0.1% to 28,004.68. Meanwhile, in Australia, the S&P/ASX 200 surged 0.2% to 7,348.10.

The Bank of Japan (BoJ) kept its policy settings unchanged on July 9. However, it lowered its growth forecast for the current fiscal year slightly, to 3.5%-4% from 3.5%-4.4%.

Tokyo reported a 6-month high number of new infections on Thursday, 1,308, just over a week before the Olympic Games are due to begin. Remarkably, many in Japan worry the Olympics will increase the risks of further outbreaks.

In the prior session, the S&P 500 dropped 0.3% to 4,360.03. It is on track for its first weekly fall in four weeks. The Nasdaq Composite slipped 0.7% to 14,543.13. The Dow Jones Industrial Average (DJIA) boosted by 0.2% to 34,987.02. The Russell 2000 index of small cap stocks fell 0.6% to 2,190.29.

Investors are waiting for companies to report how higher inflation is affecting their businesses. They will start reporting next week.