Left Menu
Development News Edition

GLOBAL MARKETS-World stocks take fresh dip as COVID infection rate weighs

The slight recovery in European stock markets followed a strong euro zone quarterly GDP print - up 12.7% -, one day after the European Central Bank pledged more help for the economy when it next meets in December to help counter the potential economic hit from the pandemic. Societe Generale FX analyst Kit Juckes said that given the recent imposition of a fresh lock-down in France, the positive growth data there - an 18.2% quarter-on-quarter jump - was not enough to outweigh the virus concerns.

Reuters | Updated: 30-10-2020 18:03 IST | Created: 30-10-2020 18:03 IST
GLOBAL MARKETS-World stocks take fresh dip as COVID infection rate weighs

World stocks fell further and oil headed for a double-digit weekly slide on Friday as jitters over a rising global COVID-19 infection rate and next week's U.S. presidential election more than offset strong euro zone quarterly growth data. A strong central bank-fuelled bounce back from the initial pandemic slide earlier in the year has faltered this week, with concerns about an even worse second wave of infections, particularly in Europe, taking the froth off markets.

"The US election, the extent of further lockdown measures, Brexit negotiations and vaccine news all present both upside and downside risks over the coming weeks and it is understandable that investors may want to proceed with caution," said Mark Dowding, chief investment officer at BlueBay Asset Management. World stocks were down 0.2% at 1103 GMT, tracking weakness in Asia, while U.S. stock futures were down 0.8% to 1%, pointing to a lower open on Wall Street. Gold rose, with spot prices climbing 0.6% to $1,878 an ounce.

In Europe, the blue-chip EuroSTOXX 50 recovered early losses to trade flat after strong regional growth numbers, but is on track for a weekly loss of 6.7% and remains around levels last seen in late May. MSCI's broadest index of Asia-Pacific shares outside of Japan closed down 1.2% for a 2.2% weekly loss, breaking four straight weeks of gains.

"New lockdowns across Europe are being harshly repriced by markets," Barclays equity strategist Emmanuel Cau said in a note to clients. "With complacency going fast, this dip could end up offering another good entry point, but a lot depends on the election outcome and timing of the results."

European government bond yields rose slightly in response to fresh COVID restrictions across the continent, with Italian, Spanish and German 10-year debt yields all up around 1 basis point. Brent crude gave up intra-morning gains to trade down 0.2%, broadly in line with its U.S. peer, facing weekly losses of around 10%.

That in turn led to a broad sell-off of commodity linked currencies including the Russian rouble, Norwegian crown and Canadian dollar, which was facing its worst week since April. The slight recovery in European stock markets followed a strong euro zone quarterly GDP print - up 12.7% -, one day after the European Central Bank pledged more help for the economy when it next meets in December to help counter the potential economic hit from the pandemic.

Societe Generale FX analyst Kit Juckes said that given the recent imposition of a fresh lock-down in France, the positive growth data there - an 18.2% quarter-on-quarter jump - was not enough to outweigh the virus concerns. This week has seen global coronavirus cases rise by over 500,000 for the first time, with France and Germany preparing fresh lockdowns.

In response, analysts expect an expansion and extension of the ECB's Pandemic Emergency Purchase Programme, a lower deposit facility rate, and even more generous lending terms for banks in December. This saw the euro slide to a four-week low of $0.1648 before recovering slightly on Friday to trade at $1.1672, down around 0.4% since the start of the month.

The dollar index, meanwhile, held steady, bolstered by a solid session on Wall Street overnight after some strong tech sector earnings and data showing the U.S. economy grew at a record annualised pace of 33.1% in the third quarter. (Additional reporting by Marc Jones and Olga Cotaga in London; Editing by William Maclean and Emelia Sithole-Matarise)


TRENDING

OPINION / BLOG / INTERVIEW

Turbulence surrounding tobacco control in Ghana

... ...

Refugee compassion and response: Ideas to mitigate disasters now and in their future

Their homeland becomes a forbidden territory for them and more likely than not, their journey to foreign soil is no less traumatizing, not to say deadly. It is crucial to help refugees live a life of dignity and purpose....

Inadequate water infrastructure causes a tidal wave of coronavirus in rural Alaska

... ...

Videos

Latest News

Philip Green's Arcadia UK fashion group falls into administration

British tycoon Philip Greens Arcadia fashion group has collapsed into administration, putting over 13,000 jobs at risk and becoming the countrys biggest corporate casualty of the COVID-19 pandemic so far, administrator Deloitte said on Mond...

OPEC leans towards extending oil cuts into first quarter if allies agree

OPEC members moved closer on Monday to extending existing oil production cuts for three months from January but still need to convince the wider OPEC group led by Russia to support the move, ministers and delegates said on Monday.I think wi...

Ivory Coast, Ghana cancel cocoa sustainability schemes run by Hershey

Ivory Coast and Ghana are cancelling all cocoa sustainability schemes that U.S.-based Hershey runs in their countries, accusing the chocolatemaker of trying to avoid paying a cocoa premium aimed at combating farmer poverty. In a letter addr...

Navy will decommission warship damaged in suspected arson

The Navy said Monday that it will decommission a warship docked off San Diego after suspected arson caused extensive damage, making it too expensive to restore. Fully repairing the USS Bonhomme Richard to warfighting capabilities would cost...

Give Feedback