AP and AFP
TOKYO/HONG KONG–Stock markets drifted lower Tuesday after U.S. indexes pulled back from record highs and investors awaited fresh data from China and corporate earnings. In Europe, France’s CAC-40 lost 0.4 percent to 4,387.15 and Germany’s DAX dropped 0.6 percent to 9,853.92. Britain’s FTSE 100 fell 0.3 percent, to 6,802.08. In both Europe and the U.S., investors are watching for earnings reports that could provide a gauge of the strength of the recovery. U.S. markets looked set for a lackluster start, with Dow and S&P 500 futures both down 0.2 percent. U.S. indexes last week rallied to new highs following a government report that showed the world’s largest economy generated a stronger-than-expected 288,000 jobs in June. Asian markets were mixed on Tuesday, after Wall Street retreated from record highs and U.S. analysts warned that a recent equities rally could see a sharp reverse. Investors are hoping to get a better handle on the state of the global economy with the release this week of Chinese economic data as well as minutes from the Federal Reserve’s most recent policy meeting. Tokyo eased 0.42 percent, or 65.03 points, to finish at 15,314.41, while Sydney fell 0.15 percent, or 8.0 points, to 5510.9 and Seoul was flat, nudging up 1.54 points to 2,006.66. Shanghai added 0.20 percent, or 4.09 points, to 2,064.02 and Hong Kong closed flat, ticking up 0.46 points to 23,541.38. After a long Independence Day weekend U.S. shares returned on Monday for the first time since Thursday’s better-than-expected jobs report. However, they ended in the red on profit-taking while there were warnings that global markets could be headed for further losses after enjoying a positive run-up in the past few weeks, which has seen the Dow and S&P 500 touch new records. Nobel prizewinning economist Joseph Stiglitz said in a television interview he was “very uncomfortable” with current stock prices, while Raymond James managing director Jeffrey Saut said in a note that stocks are vulnerable to a 10-12 percent decline in the weeks ahead. The Dow slipped 0.26 percent after breaking 17,000 for the first time on Thursday, while the S&P 500 eased 0.39 percent. The Nasdaq declined 0.77 percent. On Wednesday the Fed is due to release the minutes from its most recent policy meeting. “Attention is now turning to U.S. corporate earnings and the U.S. Fed’s stance on monetary policy, especially the pace of stimulus tapering after last week’s strong jobs data,” Rakuten Securities senior market analyst Masayuki Doshida told Dow Jones Newswires.
Also Wednesday China will announce inflation data for June, following that up with trade figures on Thursday. There are hopes for another upbeat set of results following a recent string of good news, including on manufacturing activity. Gold fetched US$1,322.43 an ounce at 1130 GMT compared with US$1,314.03 late Monday.