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Business News/ News / World/  Global Markets: Stocks sink as coronavirus cases soar, lockdowns loom; dollar up
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Global Markets: Stocks sink as coronavirus cases soar, lockdowns loom; dollar up

The pan-European STOXX 600 index lost 3.29%, touching its lowest level since May
  • The rising coronavirus infections weighed on oil prices on fears of a supply glut and weaker fuel demand
  • Source: APPremium
    Source: AP

    Stocks tumbled across the globe on Wednesday on concerns that rising COVID-19 cases in Europe, the United States and elsewhere will damage already-fragile economic recoveries, while the U.S. dollar rose on safe-haven bids.

    Treasury yields fell alongside the price of oil and gold was under pressure from the rising dollar.

    On Wall Street, the energy and technology sectors of the benchmark S&P 500 were among the hardest hit.

    "Whether you call it a continuation of the pandemic or a third wave of new case discovery - it is the largest concern," said Art Hogan, chief market strategist at National Securities in New York.

    "Unless and until we get through this pandemic, it is hard for investors to imagine a better economic time."

    The Dow Jones Industrial Average fell 808.89 points, or 2.95%, to 26,654.3, the S&P 500 lost 97.21 points, or 2.87%, to 3,293.47 and the Nasdaq Composite dropped 333.79 points, or 2.92%, to 11,097.56.

    European shares touched their lowest since late May as Germany and France prepared to announce restrictions approaching the level of the lockdowns in the spring, as COVID-19 deaths across Europe jumped almost 40% in a week.

    The pan-European STOXX 600 index lost 3.29%, touching its lowest level since May. MSCI's gauge of stocks across the globe shed 2.57%.

    Asian shares lost ground after initially showing some resilience, in part due to more limited COVID-19 outbreaks and better recoveries in the region's major economies.

    Emerging market stocks lost 1.18%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.69% lower, while Japan's Nikkei lost 0.29%.

    Concerns over a rising wave of COVID-19 infections played out in currency and bond markets, too, with the euro slumping against the dollar.

    The dollar index rose 0.368%, with the euro down 0.49% to $1.1737.

    The Japanese yen strengthened 0.16% versus the greenback to 104.26 per dollar, while Sterling was last trading at $1.3, down 0.33% on the day.

    Adding to the mood of uncertainty was the Nov. 3 U.S. presidential election.

    Former Vice President Joe Biden has enjoyed a consistent lead over President Donald Trump ahead of the vote. Investors cautiously bet on his victory and a possible "blue wave" outcome, where Democrats control both chambers of Congress.

    UBS strategist Vassili Serebriakov said a Biden administration would be seen as de-escalating trade tensions with traditional allies such as Europe and Canada, as well as China, which should improve market sentiment overall and weigh on the dollar as a safe haven.

    Treasury yields fell as traders moved away from risk assets.

    Benchmark 10-year notes last rose 3/32 in price to yield 0.7693%, from 0.778% late on Tuesday.

    The rising coronavirus infections weighed on oil prices on fears of a supply glut and weaker fuel demand.

    "Crude oil is under pressure from the increase in COVID-19 cases, especially in Europe, and a larger than expected storage build (in the U.S.)," said Robert Yawger, director of energy futures at Mizuho in New York.

    U.S. crude recently fell 5.26% to $37.49 per barrel and Brent was at $39.26, down 4.71% on the day.

    Spot gold dropped 1.7% to $1,875.36 an ounce. Silver fell 5.74% to $23.14.


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    This story has been published from a wire agency feed without modifications to the text.

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    Published: 28 Oct 2020, 11:02 PM IST
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