World Shares Advance, Tracking Wall Street Week’s End Rally

By The Associated Press
The Associated Press
The Associated Press
August 1, 2022Updated: August 1, 2022

BANGKOK—World shares were mostly higher Monday after a strong close on Wall Street last week, though the latest manufacturing surveys showed weakening factory activity in Asia’s two biggest economies: China and Japan.

Germany’s DAX gained 0.3 percent to 13,522,83 while the CAC 40 in Paris added 0.4 percent to 6,473.00. Britain’s FTSE 100 climbed 0.4 percent to 7,455.55.

The futures for the S&P 500 and the Dow industrials were 0.2 percent lower. On Friday, Wall Street closed out its best month since November 2020. The S&P 500 index, a benchmark for many stock funds, rose 1.4 percent. It finished 9.1 percent higher for July.

In Asian trading, Tokyo’s Nikkei 225 index gained 0.7 percent to 27,993.35 while the Shanghai Composite index edged 0.2 percent higher, to 3,259.96. In Sydney, the S&P/ASX 200 rose 0.7 percent to 6,993.00. The Kospi in Seoul ended nearly unchanged at 2,452.25 and Hong Kong’s Hang Seng edged less than 0.1 percent higher to 20,163.08.

Chinese manufacturing’s recovery from anti-virus shutdowns faltered in July as activity sank, a survey showed Sunday, adding to pressure on the struggling economy in a politically sensitive year when Chinese leader Xi Jinping is expected to try to extend his time in power.

Factory activity was depressed by weak global demand and anti-virus controls that are weighing on domestic consumer spending, according to the national statistics agency and an official industry group, the China Federation of Logistics & Purchasing.

“The country was already facing an uphill challenge, to put it mildly, with regard to its growth target this year, and the fact that manufacturing activity is slowing again doesn’t bode well,” Craig Erlam of Oanda said in a commentary.

A similar survey of purchasing managers, the au Jibun Bank Japan Manufacturing PMI, slipped to 52.1 in July from 52.7 in June, the slowest growth in the sector in 10 months, as costs of energy and labor rose. The survey measures various components on a scale up to 100, with readings above 50 indicating expansion.

Investors in the region will be getting a new installment of updates on corporate results this week.

Wall Street’s latest rally came as investors weighed a mix of company earnings reports and new data showing inflation jumped by the most in four decades last month.

The tech-heavy Nasdaq rose 1.9 percent, ending the month 12.4 percent higher, while the Dow Jones Industrial Average rose 1 percent and notched a 6.7 percent gain for the month. The Russell 2000 rose 0.7 percent, ending July with a 10.4 percent gain.

Weak economic data, including a report Thursday showing that the U.S. economy contracted last quarter and could be in a recession, have also spurred stocks higher by giving some investors confidence that the Federal Reserve will be able to dial back its aggressive pace of rate hikes sooner than expected.

The central bank raised its key short-term interest rate by 0.75 percentage points on Wednesday, lifting it to the highest level since 2018. The Fed is raising rates in a bid to slow the U.S. economy and quell inflation.

An inflation gauge that is closely tracked by the Federal Reserve jumped 6.8 percent in June from a year ago, the biggest increase in four decades, leaving Americans with no relief from surging prices. On a month-to-month basis, inflation accelerated to 1 percent in June from May’s 0.6 percent monthly increase, the Commerce Department said Friday.

In Europe, inflation surged in July, hitting 8.9 percent in the 19 European countries that use the euro currency.

In other trading early Monday, U.S. benchmark crude oil lost 83 cents to $97.79 per barrel. It jumped $2.20 to $98.62 on Friday. Brent crude oil, the basis for pricing international oils, lost 21 cents to $103.76 per barrel.

The U.S. dollar fell to 132.60 Japanese yen from 133.25 yen. The euro rose to $1.0236 from $1.0223.

By Elaine Kurtenbach