Global shares fall as investors await US inflation update

A man wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Tuesday, July 12, 2022. Asian shares fell Tuesday after a slump on Wall Street erased recent gains. (AP Photo/Kin Cheung)

A man wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Tuesday, July 12, 2022. Asian shares fell Tuesday after a slump on Wall Street erased recent gains. (AP Photo/Kin Cheung)

A woman wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Tuesday, July 12, 2022. Asian shares fell Tuesday after a slump on Wall Street erased recent gains. (AP Photo/Kin Cheung)

Traders work on the floor at the New York Stock Exchange in New York, July 1, 2022. Stocks are opening lower on Wall Street as markets turn cautious ahead of earnings reports from big U.S. companies starting this week and more reports that will show how badly inflation is hitting American businesses and households. The S&P 500 fell 1.1% in the early going Monday, July 11, 2022 while drops in technology stocks helped send the Nasdaq composite down 2%. (AP Photo/Seth Wenig)

TOKYO (AP) — Global shares mostly fell Tuesday after a slump on Wall Street erased recent gains. U.S. futures and oil prices also declined.

Investors are on the lookout this week for updates on inflation and corporate profits, while renewed coronavirus outbreaks are adding to jitters. Shares in Europe declined in early trading. Benchmarks finished lower in Tokyo, Seoul, Hong Kong and Shanghai but rose slightly in Sydney.

The euro cost $1.0004, down from $1.0042, having dipped as low as $1.0005. The U.S. dollar inched down to 137.17 Japanese yen from 137.47 yen.

Both currencies have been trading at 20-year lows as the dollar has surged along with U.S. interest rates, which promise higher returns for investors.

The European common currency is close to dropping below parity, or one-to-one with the dollar. The last time the euro was below $1 was on July 15, 2002.

France's CAC 40 slipped 0.5% in early trading to 5,965.08, while Germany's DAX fell 0.9% to 12,718.93. Britain's FTSE 100 edged down 0.3% to 7,176.30. The futured for the Dow industrials and the S&P 500 were 0.7% lower.

In Asian trading, Japan’s benchmark Nikkei dropped 1.8% to 26,336.66. Australia’s S&P/ASX 200 gained nearly 0.1% to 6,606.30. South Korea’s Kospi slipped 1.0% to 2,317.76. Hong Kong’s Hang Seng sank 1.3% to 20,844.74, while the Shanghai Composite index shed 1% to 3,281.47 on growing concerns over COVID-19.

Adding to the pessimism, Hong Kong authorities announced they are considering implementing an electronic health code system to restrict movements of people infected with COVID-19, as well as overseas arrivals, a system similar to what's already in place in mainland China.

The highest inflation in four decades is pushing the Federal Reserve and other central banks to hike interest rates, which puts the clamps on the economy and hurts various types of investments.

Companies this week are set to begin reporting how their profits fared during the spring. Big banks and other financial companies dominate the early part of the schedule, with JPMorgan Chase and Morgan Stanley set for Thursday. BlackRock, Citigroup and Wells Fargo are among those reporting on Friday.

Expectations for second-quarter results seem to be low. Analysts are forecasting 4.3% growth for companies across the S&P 500, which would be the weakest since the end of 2020, according to FactSet.

Even if companies end up reporting better results than expected, which is usually the case, analysts say the heavier focus will be on what CEOs say about their profit trends for later in the year.

Beyond earnings updates, reports this week on inflation will likely dominate trading. On Wednesday, economists expect a report to show that inflation at the consumer level accelerated again last month, up to 8.8% from 8.6% in May.

In energy trading, benchmark U.S. crude fell $2.87 to $101.22 a barrel. It lost 70 cents to $104.09 a barrel on Monday. Brent crude, the international standard for pricing, lost $2.43 to $104.67 a barrel.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama