More Bad News for World Shares as Euro Surges

World stocks were mostly lower Monday as the euro’s gains sent European shares lower and investors waited for damage assessments from Tropical Storm Harvey, which battered Texas’ refinery-rich Gulf Coast and sent gasoline futures spiking.

European shares sank in early trading. France’s CAC 40 lost 0.2% to 5,094.29 and Germany’s DAX shed 0.5% to 12,109.07. Wall Street was poised to open lower. Dow futures lost 0.2% to 21,776.00 and broader S&P 500 futures dipped 0.1% to 2,439.90. British markets were closed for a holiday, AP reported.

Reinsurance stocks suffered after flooding triggered by Harvey devastated Houston. Shares in Hannover Re were down 1.3% and Munich Re fell 0.8%.  Among the very few gainers were shares in telecoms firm Altice, up 1%, as investors welcomed news of a €1 billion share buyback.

Incessant rain from Harvey, which slammed ashore as a strong hurricane late last week, has submerged much of Houston and shut down Texas’s oil and gas industry. It’s unclear how bad the damage is to facilities along the state’s Gulf Coast but preliminary signs indicate widespread losses, which will have big implications for the US economy and oil and gas prices.

Gasoline futures trimmed earlier gains but were still at their highest level this year, up 4.4% to $1.74 a gallon, while crude futures were mixed. S&P Global analysts said about 2.2 million barrels per day of refining capacity was down or being brought down by Sunday.

The euro was at $1.193, off earlier highs that took the currency to its strongest level in more than two and a half years. The currency continued to rise after jumping Friday during Draghi’s speech. He didn’t address the financial health of the eurozone, but investors took that as a sign of confidence in the continent’s economy. A stronger euro makes European exports more costly for foreign buyers. The dollar fell to 109.19 Japanese yen from 109.36 yen on Friday.

“All of this is bad news for European stocks, particularly the export-heavy DAX, and we could see further moderation for European stocks at the start of this week,” said Kathleen Brooks, research director at City Index.

In Asia, Japan’s benchmark Nikkei 225 index ended practically unchanged at 19,449.90 and South Korea’s Kospi lost 0.4% to 2,370.30. Hong Kong’s Hang Seng rose less than 0.1% to 27,863.29 and the Shanghai Composite in China added 0.9% to 3,362.65. Australia’s S&P/ASX 200 shed 0.6% to 5,709.90.  

In India, Sensex closed up 154.76 points at 31750.82, while the Nifty ended higher by 55.75 points at 9912.80. The market breadth was positive as 1,607 shares advanced against a decline of 978 shares, while 149 shares were unchanged.

In Southeast Asia, Thai shares rose 0.6% to close at their highest since June 27, spurred by broad-based gains. The Singapore index closed 0.25% higher, with financials and energy stocks leading the gains. Vietnam shares rose 0.7% to hit their highest in nearly three weeks. Indonesian shares however fell slightly, with Telekomunikasi Indonesia down 0.8% and Bank Rakyat Indonesia 0.7% lower.  The Philippine market was closed for a local holiday.

Meanwhile, benchmark US crude fell 42 cents to $47.45 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 44 cents to settle at $47.87 per barrel on Friday. Brent crude, the international standard, rose 3 cents to $52.01 per barrel.