Stocks, oil slip but Chinese stocks rumble on
By Herbert Lash NEW YORK (Reuters) - Investor caution over renewed coronavirus-related lockdowns buoyed the dollar and snuffed a five-day rally in most world equity markets on Tuesday, but was not enough to halt a hot streak in Chinese stocks. The dollar edged higher as risk currencies such as the Australian dollar took a breather from recent gains and gold dipped as investors booked profits after bullion rallied to a near eight-year peak, trading around $1,780 an ounce.
By Herbert Lash
NEW YORK (Reuters) - Investor caution over renewed coronavirus-related lockdowns buoyed the dollar and snuffed a five-day rally in most world equity markets on Tuesday, but was not enough to halt a hot streak in Chinese stocks.
The dollar edged higher as risk currencies such as the Australian dollar took a breather from recent gains and gold dipped as investors booked profits after bullion rallied to a near eight-year peak, trading around $1,780 an ounce.
Equity bourses in London <.FTSE>, Paris <.FCHI> and Frankfurt <.GDAXI> fell about 1% for most of the session before paring some losses, while losses on Wall Street mounted, with the Nasdaq turning lower after posting a fresh intraday record.
U.S. Treasury yields ticked lower as a rising caseload of COVID-19, the respiratory disease caused by the novel coronavirus, raised concerns about economic reopening plans. The greater Miami area in Florida became the latest U.S. coronavirus hot spot to roll back its reopening. Cases surged nationwide by the tens of thousands and the U.S. death toll topped 130,000.
Investors remain concerned about the U.S. economic outlook, said Jim Barnes, director of fixed income for Bryn Mawr Trust in the Philadelphia suburb of Berwyn.
"Economic conditions still have a long way to go to get back to pre-crisis levels," Barnes said.
MSCI's all-country world index <.MIWD00000PUS>, which tracks shares in 49 nations, fell 3.13 points, or 0.58%, while Europe's broad FTSEurofirst 300 index <.FTEU3> dropped 0.62%.
On Wall Street, the Dow Jones Industrial Average <.DJI> fell 242.87 points, or 0.92%, to 26,044.16 and the S&P 500 <.SPX> lost 15.62 points, or 0.49%, to 3,164.1. The Nasdaq Composite <.IXIC> dropped 17.21 points, or 0.16%, to 10,416.44.
Lockdown measures were also reimposed in Melbourne, Australia, confining its nearly 5 million residents to all but essential travel for another six weeks.
"Just when many parts of the world looked to have got to grips with the coronavirus pandemic, many jurisdictions re-imposed lockdowns to contain a surge in new cases," said Luca Paolini, chief strategist at Pictet Asset Management.
Corporate earnings are expected to fall by about 20% percent this year following the deepest recession in more than a century. Pictet expects a 30% to 40% slump.
"But that does not mean equity and corporate bond markets are due a sharp fall," Paolini said, predicting the U.S. Federal Reserve will inject a further $1.3 trillion of stimulus this year and the European Central Bank will add another 1.1 trillion euros ($1.24 trillion).
The euro zone economy will drop into a deeper recession this year than previously expected and take longer to rebound, the European Commission forecast. The commission said the 19-nation single currency area would contract a record 8.7% before rising by 6.1% in 2021, worse than its previous forecast.
The dollar index <=USD>, which tracks the greenback versus a basket of six currencies, rose 0.22% to 96.942. The yen
Analysts said signals from the Chinese government through a state-sponsored journal on "fostering a healthy bull market," published on Monday, helped the buying binge in Chinese shares.
Copper prices soared to their highest in more than five months due to strong demand prospects in top consumer China and worries about supplies from Chile, the world's largest producer of the red metal.
Shanghai's blue-chip index was sputtering by the close after adding to its 15% gains over the past week. [.SS]
Oil prices edged higher after the U.S. government forecast higher fuel demand and lower production, overshadowing concerns that the surge in new coronavirus cases would hamper demand.
The U.S. Energy Information Administration (EIA) forecast global oil demand would recover 101.1 million barrels per day (bpd) by the fourth quarter of next year.
Brent crude futures
Spot gold rebounded to within a striking distance of $1,800 an ounce on the potential that a sharp jump in COVID-19 cases would lead to more accommodative monetary policy measures and greater demand for the safe-haven metal.
U.S. gold futures
Graphic: World's biggest stock markets since start of 2020 - https://fingfx.thomsonreuters.com/gfx/mkt/gjnvwwkrovw/Pasted%20image%201594112037896.png Graphic: Coronavirus and financial markets - https://fingfx.thomsonreuters.com/gfx/mkt/xegvbmbdkpq/Pasted%20image%201594123352010.png
(Reporting by Herbert Lash, with additional reporting by Ross Kerber in Boston; Editing by Bernadette Baum and Will Dunham)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.