BANGKOK (AP) — Shares opened lower in Asia on Monday after a broad advance in Asia following news that the U.S. economy added more jobs than expected in May.
Germany’s DAX shed 0.6% to 12,770.66 as the government reported that industrial production plunged by nearly 18% in April. That compared a nearly 9% drop in March at the height of Europe’s coronavirus lockdowns.
The CAC 40 in Paris fell 0.5% to 5,173.57, while Britain’s FTSE 100 was flat at 6,485.67. New futures were slightly higher, with the contracts for both the S&P 500 and the Dow industrials up 0.2%.
Crude oil prices rose after major oil producing nations agreed over the weekend to extend a production cut of nearly 10 million barrels of oil a day through the end of July to counter the blow to demand from the coronavirus pandemic.
U.S. crude for July delivery added 35 cents to $39.91 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, gained 50 cents to $42.80 per barrel.
In Asian trading, Japan’s Nikkei 225 index rose 1.4% to 23,178.10 after the government reported the economy contracted at a 2.2% annual rate in the January-March quarter, better than the initially estimated minus 3.4%.
Private sector spending was better than earlier reported, the Cabinet Office said. However, the first quarter came before Japan felt the full impact of partial shutdowns at home due to a nationwide state of emergency that has since been lifted.
Economists cautioned, also, that the improved business investment numbers were likely to be further revised, downward.
Elsewhere in Asia, Hong Kong’s Hang Seng ended flat at 24,776.77 and the Shanghai Composite index gained 0.2%, to 2,937.77. In South Korea, the Kospi edged 0.1% higher to 2,184.29.
India’s Sensex added 0.5%, while Thailand’s SET gave up earlier gains, falling 0.2%. Shares were higher in Taiwan and the rest of Southeast Asia.
Australia’s markets were closed for a holiday.
The S&P 500 gained 2.6% on Friday, its eighth gain in 10 trading sessions, after the U.S. government said employers added 2.5 million workers to their payrolls in May, when economists were expecting them instead to slash another 8 million jobs.
That raised hopes that the worst of the recession may have already passed. But economists cautioned that many risks still loom on the long road to a full recovery.
“One should … be cautioned against reading too much into any single month-on-month change, particularly during such times of uncertainty,” Jingyi Pan of IG said in a commentary.
The S&P 500 has gained more than 40% since late March, and is now down just 5.7% from its record set in February, before investors had come to grips with the full extent of economic devastation from the pandemic.
The yield on the 10-year Treasury rose to 0.92% on Monday from 0.88% late Friday. Moving largely in tandem with expectations for economic growth and inflation, it is seen as a harbinger of risk and has shown much more caution than stocks recently.
Massive central bank stimulus has helped spur gains in share prices driven by hopes that economies will swiftly recover from the worst downturn in decades as governments relax lockdowns.
Still, U.S. unemployment remains above 13%, nearly quadruple where it was at the start of the year, and on par with its level during the the Great Depression.
The biggest uncertainty is whether major virus outbreaks will return, leading to further shutdowns.
Tensions between the United States and China are also raising worries the world’s two largest economies might resume their trade war.
Some investors are also worried about volatility that could be created by this fall’s U.S. elections.
In currency dealings, the dollar fetched 109.52 Japanese yen, down from 109.59 yen on Friday. The euro gained to $1.1305 from $1.1288.