October 26, 2020
By Pete Schroeder
(Reuters) – Asian markets look set to continue a downward path on Tuesday after soaring global coronavirus cases and shrinking hopes for a U.S. stimulus deal took a toll on Wall Street and drove up the U.S. dollar.
Australia’s ASX 200 <.AXJO> opened down about 0.6%, while Japan’s Nikkei 225 futures <NKc1> were up 0.04%. The Nikkei 225 index <.N225> closed down 0.09% on Monday. The futures contract was down 0.25% from that close.
Hong Kong’s Hang Seng index futures <.HSI> <.HSIc1> were up 0.1%.
MSCI’s gauge of stocks across the globe <.MIWD00000PUS> was down 1.52%.
U.S. indices fell sharply to open the week’s trading, as anxiety over new record daily COVID-19 cases in the United States, Russia and France weighed on investor appetite.
And while House Speaker Nancy Pelosi is still hopeful an agreement can be reached on a coronavirus relief bill before the Nov. 3 elections, White House economic adviser Larry Kudlow told reporters on Monday that talks have slowed.
“The challenge for markets is that in most cases they are already pricing a very strong economic bounce. The new outbreaks, and the potential for a double-dip recession, directly contradict this assumption,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.
The sharp decline set a bleak tone ahead of a busy third-quarter earnings season, with large U.S. tech firms like Apple Inc <AAPL.O>, Amazon.com Inc <AMZN.O> and Google-parent Alphabet Inc <GOOGL.O> set to report. Microsoft Corp <MSFT.O> reports its results Tuesday.
The Dow Jones Industrial Average <.DJI> fell 650.19 points, or 2.29%. The S&P 500 <.SPX> lost 64.42 points, or 1.86%, while the Nasdaq Composite <.IXIC> dropped 189.35 points, or 1.64%.
Renewed coronavirus fears drove investors into a host of safe-haven investments and away from riskier assets, including in the oil market. Brent <LCOc1> dropped $1.31, or 3.1%, while U.S. West Texas Intermediate (WTI) fell $1.29, or 3.2%. Both contracts fell almost 2.5% last week.
Investors shedding risk gave way to a rise in the safe-haven U.S. dollar compared to other currencies. The dollar index <=USD> rose 0.286%, with the euro <EUR=> down 0.45% to $1.1806. Spot gold <XAU=> added 0.1% to $1,902.02 an ounce.
Longer-term U.S. Treasury yields also fell, with the benchmark 10-year <US10YT=RR> yield down 4.3 basis points in afternoon trading at 0.7977%, well below its four-month high reached on Friday.
(Reporting by Pete Schroeder; editing by Richard Pullin)
from One America News Network https://ift.tt/3mqSP2m
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