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World Shares Follow Wall St. Higher 06/30 04:42
Markets in Europe and Asia were mostly higher on Tuesday, tracking Wall
Street gains, while the Japanese yen was trading near a 40-year low against the
U.S. dollar.
HONG KONG (AP) -- Markets in Europe and Asia were mostly higher on Tuesday,
tracking Wall Street gains, while the Japanese yen was trading near a 40-year
low against the U.S. dollar.
U.S. futures were little changed.
In Germany, the DAX climbed 0.8% to 24,810.48 while the CAC 40 in Paris
edged 0.1% higher to 8,374.80. Britain's FTSE 100 picked up 0.4% to 10,524.33.
Shares in South Korea, Japan and Taiwan rebounded from earlier losses
spurred by selling of technology companies due to concerns over the
sustainability of the boom in artificial intelligence.
Tokyo's Nikkei 225 was up 0.9% to 70,062.32. Chip equipment maker Tokyo
Electron jumped 3.3%. SoftBank Group, an investment holding company that
invests in OpenAI, was up 1.2%.
South Korea's Kospi index, which has performed strongly during the global AI
frenzy due to growing demand for memory chips from major chipmakers like SK
Hynix, gained 1% to 8,476.48.
Shares of Samsung Electronics rose 3.4% and those of SK Hynix rose 0.8%
after the two companies and the government jointly announced plans Monday for
over $500 billion of investments in the country's chipmaking and AI.
Elsewhere in Asia, Hong Kong's Hang Seng shed 0.6% to 22,881.02 and the
Shanghai Composite index rose 0.5% to 4,094.40. Taiwan's Taiex picked up 2.5%.
China reported its factory activity slightly picked up pace in June, mainly
due to exports and demand generated by expanding use of AI. The survey released
by the National Bureau of Statistics said the manufacturing purchasing managers
index, or PMI, expanded to 50.3 in June from 50 in May. That's better than had
been expected.
Australia's S&P/ASX 200 dropped 0.5% to 8,778.70, while India's Sensex
slipped 0.3%.
The dollar rose to nearly 162.42 yen early Tuesday in Tokyo, its highest
level since late 1986, and was trading at 162.40 yen by late afternoon.
The yen's prolonged slump against the dollar, largely due to a growing gap
between interest rates in the U.S. and Japan, has spurred speculation that
Tokyo might intervene to prop up the currency. However, Japan's finance
minister said only that the government was ready to "respond appropriately
whenever necessary."
Earlier interventions appeared only to slow the dollar's rise against the
yen.
The Federal Reserve is expected to keep interest rates higher for longer due
to inflationary pressures partly driven by higher oil and gas prices resulting
from the Iran war. Japan's central bank is moving very gradually to raise
interest rates from near zero, having increased its key rate to 1% last month,
its highest level in more than 30 years.
The dollar to yen rate "has spiked above 162 as everyone is holding their
breath to see when Japanese officials intervene," Ipek Ozkardeskaya of
Swissquote said in a commentary. "Intervening now would change nothing about
the underlying market direction, but would cost dearly. Unless we see an
aggressive sell-off in the yen, the Japanese authorities seem willing to remain
on the sidelines."
The euro fell to $1.1409 from $1.1422.
U.S. futures edged higher.
On Monday, Wall Street's benchmark S&P 500 added 1.2%. The Dow Jones
Industrial Average climbed 0.6%, and the Nasdaq composite gained 2.1%.
High tech companies led gains as Intel gained 2.7% and Micron Technology
climbed 1.1%. Nvidia rose 1.3% and AMD, or Advanced Micro Devices, was 3.4%
higher.
Oil prices fell modestly early Tuesday as traders monitored developments in
negotiations between the U.S. and Iran on ending their four-month war.
Crude prices have stabilized following attacks across the Persian Gulf over
the weekend after the United States and Iran separately announced they will
send delegations to Qatar this week, though Tehran insisted it has not agreed
to meet with the United States "at any level."
Brent crude, the international standard, fell 0.7% to $73.40 a barrel. It
was trading near $72 per barrel before the war began to disrupt transport of
oil and gas through the Strait of Hormuz.
Benchmark U.S. crude declined 0.8% to $70.22 a barrel.
The hope is that an end to the war with Iran will restore full access to the
strait, allowing tankers to exit the Persian Gulf and deliver crude to
customers worldwide. That would help lower the price of oil, whose jumps
because of the war have sent a punishing wave of inflation around the world.
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