AVN 64.76 No Change ▼ 0.00 (0%)
BAFL 31.49 Increased By ▲ 0.31 (0.99%)
BOP 4.79 Decreased By ▼ -0.03 (-0.62%)
CNERGY 3.85 No Change ▼ 0.00 (0%)
DFML 14.48 Increased By ▲ 0.48 (3.43%)
DGKC 41.65 No Change ▼ 0.00 (0%)
EPCL 46.81 Increased By ▲ 0.51 (1.1%)
FCCL 11.33 Decreased By ▼ -0.07 (-0.61%)
FFL 5.06 No Change ▼ 0.00 (0%)
FLYNG 5.82 Increased By ▲ 0.02 (0.34%)
GGL 10.46 Increased By ▲ 0.55 (5.55%)
HUBC 65.54 Increased By ▲ 1.34 (2.09%)
HUMNL 5.61 No Change ▼ 0.00 (0%)
KAPCO 27.73 Decreased By ▼ -0.09 (-0.32%)
KEL 2.16 Increased By ▲ 0.01 (0.47%)
LOTCHEM 24.40 Decreased By ▼ -0.10 (-0.41%)
MLCF 21.51 Decreased By ▼ -0.34 (-1.56%)
NETSOL 84.61 Increased By ▲ 0.31 (0.37%)
OGDC 87.02 Decreased By ▼ -0.09 (-0.1%)
PAEL 11.00 Increased By ▲ 0.05 (0.46%)
PIBTL 4.19 Decreased By ▼ -0.04 (-0.95%)
PPL 75.35 Decreased By ▼ -1.43 (-1.86%)
PRL 13.60 Decreased By ▼ -0.13 (-0.95%)
SILK 0.89 Decreased By ▼ -0.03 (-3.26%)
SNGP 41.27 Decreased By ▼ -0.33 (-0.79%)
TELE 5.84 Decreased By ▼ -0.11 (-1.85%)
TPLP 15.62 Increased By ▲ 0.01 (0.06%)
TRG 111.84 Increased By ▲ 0.59 (0.53%)
UNITY 13.97 Increased By ▲ 0.13 (0.94%)
WTL 1.17 Increased By ▲ 0.03 (2.63%)
BR100 4,064 Increased By 18.2 (0.45%)
BR30 14,468 Increased By 34.8 (0.24%)
KSE100 40,734 Increased By 113.6 (0.28%)
KSE30 15,230 Increased By 59.4 (0.39%)
Markets

Stocks sink as coronavirus lockdowns loom

  • Euro STOXX 600 down 2.8% to five-month low.
  • Germany and France prepare to announce restrictions.
  • Wall Street futures point to losses.
  • Euro down 0.6% versus dollar.
  • Currency market volatility jumps before US election.
Published October 28, 2020
Follow us

LONDON: Global stocks and the euro tumbled on Wednesday as coronavirus infections rose in Europe and the United States, igniting fears of strict lockdowns that would damage already fragile economic recoveries.

European shares fell 2.8% to their lowest since late May as Germany and France prepared to announce restrictions approaching the level of last spring's lockdowns, as COVID-19 deaths across Europe rose almost 40% in a week.

French shares were among the hardest hit, losing 3.2% to a five-month low. Investors were rattled by a media report that France might impose a national lockdown from midnight on Thursday.

In Frankfurt, German stocks slumped 3.1% to their lowest since June. Chancellor Angela Merkel was due to meet state premiers to discuss closing restaurants and bars and allowing people to go out in public only with members of their own household.

The gloomy news pummeled stocks seen as especially sensitive to the economy. Automakers and banks led the losses, falling 3.9% and 2.1% respectively.

Concerns over a second wave of infections played out in currency and bond markets, too, with the euro slumping 0.6% against the dollar to $1.1736. German government bond yields fell to their lowest since March.

Wall Street futures pointed to losses for US stocks of 1.1% to 1.8%.

The MSCI world equity index, which tracks shares in 49 countries, fell 0.6%.

The United States, Russia, France and others have seen record numbers of infections in recent days with European governments introducing new curbs that investors fear could maul fragile recoveries.

"The appetite of the different countries' authorities to enforce new lockdowns - that's the point of discrimination between good market performance and bad market performance," said Alessia Berardi, senior economist at Amundi. "The second wave is now clearly very strong in Europe."

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.

MSCI's ex-Japan Asia index lost 0.1%, turning negative even after China and South Korea made gains.

Wall Street saw a mixed day on Tuesday, with the S&P 500 losing 0.3% but the tech-heavy Nasdaq Composite climbing 0.6%.

Apple Inc, Amazon.com, and Google-parent Alphabet report later this week, closely watched because they have been among the few winners from the pandemic.

ELECTION UNCERTAINTY

Adding to the mood of uncertainty is the Nov. 3 US presidential election.

Former Vice President Joe Biden has enjoyed a consistent lead over President Donald Trump. Investors cautiously bet on his victory and possibly a "blue wave" outcome, where Democrats take back the Senate as well.

But Wall Street's volatility index, a measure of market expectations in share price swings, rose to 36.54, its highest since early September.

That reflects wariness that the election outcome itself could be contested, some market players say. An unclear result would leave expectations of a US fiscal stimulus package to counter the coronavirus pandemic in limbo.

"It is not yet clear that we will have a winner at this time (next week) as many State Secretaries and voting commissions are hedging their bets that they will indeed be able to project the winner by next Wednesday morning," Deutsche Bank analysts wrote.

The uncertainty was apparent in currency markets, too: One-week implied volatility indicators for the euro and the yen rose to their highest in nearly seven months. The same measure of volatility for the Chinese yuan also spiked, hitting its highest since January 2016.

Against a basket of currencies, the dollar gained 0.4%.

Comments

Comments are closed.

Stocks sink as coronavirus lockdowns loom

KSA links oil refinery’s setup with political consensus

Panel asks PD to broker agreements between govt, gas producing provinces

PM invites IK, others to APC on terrorism, economy

Jul-Jan trade deficit shrinks 31.97pc to $19.632 YoY

Dar approves proposal to raise $2bn from expats

Rules notified: FBR, banks can share info about civil servants’ assets

IK writes letter to President: Agencies accused of meddling in political affairs

Broadcast journalist arrested

Smuggling not the main reason behind USD shortage: FBR

SBP’s reserves slip to $3bn