World stocks sag on pandemic worries; gold gains on safety bid

By Koh Gui Qing NEW YORK (Reuters) - Global stock markets mostly retreated on Wednesday as a record number of new coronavirus infections in parts of Europe led investors to shift away from risky assets and opt for traditional safe-havens such as gold. Concerns that a resurgence in the COVID-19 pandemic could lead governments to shut down economies again spurred some investors to take profits in shares, particularly following the recent rally in equity markets. Uncertainty about the pandemic was compounded by announcements on Tuesday that separate trials for a COVID-19 vaccine and a treatment for the illness have been paused, outweighing a brief boost to stocks from a positive earnings report from U.S.

Reuters October 15, 2020 01:05:49 IST
World stocks sag on pandemic worries; gold gains on safety bid

World stocks sag on pandemic worries gold gains on safety bid

By Koh Gui Qing

NEW YORK (Reuters) - Global stock markets mostly retreated on Wednesday as a record number of new coronavirus infections in parts of Europe led investors to shift away from risky assets and opt for traditional safe-havens such as gold.

Concerns that a resurgence in the COVID-19 pandemic could lead governments to shut down economies again spurred some investors to take profits in shares, particularly following the recent rally in equity markets.

Uncertainty about the pandemic was compounded by announcements on Tuesday that separate trials for a COVID-19 vaccine and a treatment for the illness have been paused, outweighing a brief boost to stocks from a positive earnings report from U.S. investment bank Goldman Sachs Group .

Wall Street sentiment took a hit after U.S. Treasury Secretary Steven Mnuchin said a deal for fiscal stimulus would not likely be reached before the Nov. 3 elections.

Major U.S. stock indexes gave up early gains, and by 1753 GMT, the S&P 500 <.SPX> had fallen 23 points, or 0.7%, to 3,488.88. The Dow Jones Industrial Average <.DJI> dropped 133 points, or 0.5%, to 28,554.13, while the Nasdaq Composite <.IXIC> shed 96 points, or 0.8%, to 11,767.26.

"The fear is we are headed back towards a lockdown, not a re-opening of economies," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

France declared a public health state of emergency on Wednesday, while Italy, Russia and Poland all reported their highest-ever daily tallies of new infections.

The pan-European STOXX 600 <.STOXX> ended flat at 370.62, while markets in Frankfurt <.GDAXI> and Paris <.FCHI> were flat and down 0.1%, respectively. London <.FTSE>, buffeted in part by Brexit angst, dropped 0.6%. World stocks <.MIWD00000PUS> slipped 0.3% but remained within sight of the all-time high struck on Sept. 3.

Asian stocks also had a lackluster showing. MSCI's broadest index of Asia-Pacific shares outside of Japan <.MIAPJ0000PUS> had tracked Wall Street's losses overnight to end a seven-day rally.

The index was last down 0.11%, having toppled from a two-and-a-half-year high of 588.76 touched on Tuesday. Chinese shares <.CSI300> closed down 0.7%.

Bolstered by uncertainty around the pandemic, the price of gold , a safe-haven asset, climbed more than 1% to a high of $1,912.51 an ounce.

Government bonds also benefited from investor caution. German bund yields , which move inversely to prices, hit their lowest level since May [EUR/GVD], while the 10-year U.S. Treasury yield dipped to 0.7256%.

The U.S. dollar softened after pulling its best day in three weeks on Tuesday. The dollar index <=USD>, which measures the greenback against a basket of six major currencies, fell 0.2% to 93.38.

The weaker dollar, which makes oil cheaper for holders of other currencies, supported oil prices.

Concerns that fuel demand will continue to falter with rising coronavirus cases in Europe and the United States, the world's biggest oil consumer, dragged on oil prices. Brent and U.S. crude pared earlier gains and were at $43.22 and $40.92 a barrel, respectively.

(Reporting by Koh Gui Qing; Editing by Lisa Shumaker and Leslie Adler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

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

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

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.