Beijing announced a sweeping overhaul of private education companies
Wall Street stocks surged on Friday to finish the week on a strong footing. The Dow Jones Industrial Average gained 0.68% to close above the 35,000 figure for the first time. The S&P 500 index and the Nasdaq Composite both rallied over 1% as investors saw a dip in stocks as a chance to buy low.
Today in Asia, equities were mostly lower, with MSCI’s broadest index of Asia-Pacific shares outside Japan dropping over 2% to its lowest since December after Beijing announced a sweeping overhaul of private education companies. Against this backdrop, Hong Kong’s Hang Seng sank 4.13%, the Shanghai Composite index dropped 2.34%, while the Kospi in Seoul declined 0.91%. Bucking the trend, Tokyo’s Nikkei 225 gained over 1% despite preliminary factory and service activity surveys in Japan showed a slowdown.
European stocks edged lower on Monday, digesting the news from China and looking ahead to a key meeting of the U.S. Federal Reserve due later this week. The pan-European Stoxx 600 fell 0.5% by mid-morning. U.S. stock index futures fell in early premarket trade ahead of fresh corporate earnings. Also, market players continue to monitor a surge in Covid-19 cases across the continent.
Meanwhile, the dollar is mostly lower versus major rivals at the start of the week. EURUSD, however, continues to struggle below the 1.1800 figure, lacking bullish drivers at this stage. On the data front, the headline German IFO business climate index fell to 100.8 in July versus last month’s 101.7 and the consensus estimates of 102.1. Furthermore, the institute’s Economist Klaus Wohlrabe said that supply problems are weighing on the German economy in both industry and retail.