International World Stocks down on fears over second wave as lockdowns ease

Stocks down on fears over second wave as lockdowns ease

As some of the worst-hit countries including Spain, Italy and France take heart from slowing death and infection rates, they are gradually allowing businesses to open up and try to get back to some semblance of normality.

Author

Date

Category

- Advertisement -

Fears of a second wave of coronavirus infections in some parts of the world weighed on equities Tuesday, bringing a dose of hard reality to markets after weeks of rallies fuelled by the easing of lockdown measures and hopes for economic recovery.

As some of the worst-hit countries including Spain, Italy and France take heart from slowing death and infection rates, they are gradually allowing businesses to open up and try to get back to some semblance of normality.

However, after weeks of no new cases, Wuhan, the central Chinese city where the outbreak first emerged, reported six new infections in two days and South Korea announced its biggest spike in new cases for more than a month.

The news jolted confidence on trading floors and weighed on regional markets Tuesday.

- Advertisement -

Hong Kong, Sydney, Mumbai, Taipei, Singapore and Jakarta were all down more than one percent, while Tokyo and Shanghai fell 0.1 percent each.

Seoul eased 0.7 percent and Manila was off 0.3 percent, though there were gains in Wellington and Bangkok.

London, Paris and Frankfurt reversed initial losses to sit slightly higher in mid-morning trade.

“Indications abound that increased mobility will lead to re-occurrences of the virus, which will change the slope of the recovery,” said AxiCorp’s Stephen Innes, noting that news reports had generally emphasised the negative elements of reopening.

“While markets may eventually desensitise to mini-cluster outbreaks, provided death statistics remain static… at this stage, it does not lessen fears of a significant secondary spreader, which will undoubtedly weigh on consumer sentiment and hurt the rebound.”

He added that investors would have to expect such uncertainty until a vaccine is available.

– How long to recover? –
The losses come after a healthy rally across equity markets from troughs reached in March as the disease began to take hold around the world and forced nations to lock down, effectively closing the global economy and pushing it into an expected recession.

And, while there are forecasts that growth will bounce back, there is discussion over how quickly that will happen.

“It’s well and good to say ‘OK, we’ve contained the disease’, but how long does the recession last?” Chris Rands, at Nikko Asset Management, said.

“Typically when you look at unemployment spikes they take years to fix, they don’t fix themselves in three months.”

Oil prices rose, taking some joy from news that Saudi Arabia would slash an extra million barrels per day from its June output, leaving it with just short of 7.5 million, which ANZ said would be the lowest since 2002.

Kuwait and the United Arab Emirates also announced cuts to go with Saudi Arabia’s reduction.

After last month’s historic collapse in prices below zero, oil has rallied in recent weeks on the reopening and after top crude producers agreed to slash output by 10 million barrels a day.

– Key figures around 0810 GMT –
Tokyo – Nikkei 225: DOWN 0.1 percent at 20,366.48 (close)

Hong Kong – Hang Seng: DOWN 1.5 percent at 24,245.68 (close)

Shanghai – Composite: DOWN 0.1 percent at 2,891.56 (close)

London – FTSE 100: UP 0.6 percent at 5,975.14

West Texas Intermediate: UP 2.5 percent at $24.74 per barrel

Brent North Sea crude: UP 1.4 percent at $30.04 per barrel

Euro/dollar: DOWN at $1.0815 from $1.0817 at 2040 GMT

Dollar/yen: DOWN at 107.57 yen from 107.65 yen

Pound/dollar: DOWN at $1.2330 from $1.2337

Euro/pound: UP at 87.68 pence from 87.65 pence

New York – Dow: DOWN 0.5 percent at 24,221.99 (close)

dan/qan

© Agence France-Presse

/AFP

Please follow and like us:
Tweet
Share
- Advertisement -

Online response to Ng Chee Meng: You don’t have to be an MP to help out

Singapore — There have been comments -- appreciative and not so appreciative -- on a Facebook post on Oct 18 by losing People's Action Party candidate in Sengkang GRC in this year's General Election, Mr Ng Chee Meng, that a Sengkang...

Malaysians rally to help homeless man selling ‘you tiao’ so he can support his 2 daughters

Selangor—One of the very best things we can do for each other in hard times these days is not only to help each other, but also to draw attention to those who need more help than ever. A Facebook user in Malaysia...

Vivian Balakrishnan takes rapid COVID-19 test on camera to “demystify” the process

Foreign Affairs Minister Vivian Balakrishnan performed an Antigen Rapid Test (ART) on himself, for a video published on his Facebook page this week, in a bid to demystify the testing process. Singapore is preparing to allow large-scale events and open its borders...
Please follow and like us:
Tweet
Share
close

Like and follow us

Follow Me
Tweet