World shares advance after further gains on Wall Street

BANGKOK — Shares were mostly higher in Europe and Asia on Friday after another day of gains on Wall Street driven by strong corporate earnings.

Benchmarks rose in London, Paris, Tokyo and Hong Kong but fell in Seoul and Shanghai. U.S. futures edged lower and oil prices also declined.

Investors are still sifting through corporate report cards. Also, the Federal Reserve is set to raise rates next week for a fourth time this year, once again trying to tamp down high inflation without pulling the economy into a recession.

A preliminary reading on factory activity for Japan, the world’s third-largest economy, showed output and new orders contracting to their worst levels in months. Companies blamed shortages of raw materials and rising costs, but demand may be weakening as the country endures yet another wave of coronavirus outbreaks, economists said.

July’s purchasing manager indexes “suggest that the manufacturing sector is slowing as demand weakens, while the latest COVID-19 is starting to hit the service sector,” Marcel Thieliant of Capital Economics said in a commentary.

PMIs in Europe likewise showed signs of contraction as the region contends with a resurgence of coronavirus outbreaks, the war in Ukraine and disruptions of gas supplies from Russia.

But benchmarks opened higher.

Germany’s DAX edged up 0.1% to 13,266.16 while the CAC 40 in Paris added 0.1% to 6,209.60. Britain’s FTSE 100 likewise traded in a narrow range, adding 0.1% to 7,278.69.

On Wall Street, the future for the S&P 500 was down 0.3% while that for the Dow industrials was little changed. On Thursday, the S&P 500 climbed 1%, returning to its highest level in six weeks. The Dow rose 0.5% and the Nasdaq rose 1.4%. The Russell 2000 gained 0.5%.

Japan reported Friday that its inflation rose at a slower pace in June, with food prices growing 6.5% year-on-year compared to 12.3% in May and the increase in energy costs falling to 16.5% from 20.8%. Core inflation excluding volatile energy and food prices rose to 2.6% from 2.2% the month before.

The Bank of Japan has indicated that unlike the Federal Reserve and other central banks, it does not intend to raise its minus 0.1% benchmark interest rate to counter the trend given that wages are not rising in tandem with prices, constraining consumer demand.

Tokyo’s Nikkei 225 index gained 0.4% to 27,914.66 on Friday, while the Hang Seng in Hong Kong added 0.2% to 20,609.14. Australia’s S&P/ASX 200 lost less than 0.1% to 6,791.50.

In South Korea, the…