Stocks turn lower on concerns over infections increase

TOKYO (AP) — Global shares mostly turned lower on Monday on concerns about the economic damage of a rise in coronavirus cases in some countries and as investors looked to upcoming company earnings.

European benchmarks lost early gains after the Ifo index of German business confidence fell more than expected in January, reflecting the impact of new restrictions on public life. Germany's DAX was down 1.2% to 13,703.

France’s CAC 40 fell 1.1% to 5,500 and Britain's FTSE 100 slipped 0.9% to 6,637. U.S. shares were set for a cautious open, with Dow futures down nearly 0.4% and S&P 500 futures up 0.1%.

Earlier, Japan's benchmark Nikkei 225 gained 0.7% to finish at 28,822.29. Australia's S&P/ASX200 added 0.4% to 6,824.70. South Korea's Kospi gained 2.2% to 3,208.99. Hong Kong's Hang Seng jumped 2.4% to 30,159.01, while the Shanghai Composite rose 0.5% to 3,624.24.

Investors are weighing evidence of the economic damage of current coronavirus restrictions against hopes that once the pandemic comes under some control, economies will bounce back.

“Vaccine breakthroughs make it likely that life will become more functional again at some point in 2021, resulting in higher GDP growth and more robust corporate earnings,” Stephen Innes, chief global markets strategist at Axi, said in a report.

“But increasing global COVID19 infections, new variants of the virus, tightening social distancing restrictions and delays in vaccine rollouts in some places, all increase the near-term growth risks,” he said.

Markets have been mostly rallying recently on hopes that COVID-19 vaccines will lead to a powerful economic recovery later this year as daily life gets closer to normal. Hopes are also high that Washington will deliver another dose of stimulus for the economy now that the White House and both houses of Congress are under single control of the Democrats.

President Joe Biden has proposed a $1.9 trillion plan to send $1,400 to most Americans and deliver other support for the economy. But his party holds only the slimmest possible majority in the Senate, raising doubts about how much can be approved. Several Republicans have already voiced opposition to parts of the plan.

The coronavirus pandemic is also worsening and doing more damage to the economy by the day.

A UN agency said Monday that four times as many jobs were lost last year as in 2009, during the global financial crisis.

In China, where the pandemic began in late 2019, the government has reimposed travel controls after outbreaks in Beijing and other cities. A spike in infections has authorities calling on the public to avoid travel during February’s Lunar New Year holiday, normally the year’s most important family event.

Massive support from central banks is providing a major underpinning for the markets. The Federal Reserve and others are holding short-term interest rates at record lows, among other measures to support economies until the pandemic can be brought under control.

In other trading, benchmark U.S. crude rose 10 cents to $52.37 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard edged up 9 cents to $55.50 a barrel.

The dollar fell to 103.77 Japanese yen from 103.83 yen late Friday. The euro cost $1.2155, down from $1.2169.