In this news, we discuss the Stocks tumble as lockdown fears grip investors.
LONDON (Reuters) – Shares around the world fell on Wednesday as coronavirus infections grew rapidly in Europe and the United States, sparking fears of possible strict lockdowns that could hurt an already fragile economic recovery .
European .STOXX stocks fell on reports of potential lockdowns in Germany and France, losing 2.5% to a five-month low, rocked by a media report that France may proceed with a nationwide lockdown from midnight Thursday.
The Parisian .FCHI index was among the hardest hit, losing 3.5% to its lowest since May.
German shares GDAXI. fell 3.2% to its lowest level since June, after a report that Chancellor Angela Merkel wanted to close restaurants and bars to curb new infections.
In Europe, automakers .SXAP and banks .SX7P led the losses, falling 4.2% and 3.9% respectively.
Wall Street futures ESc1YMc1NQc1 lost 1.3-1.6%.
The United States, Russia, France and others have seen a record number of infections in recent days as European governments introduce new brakes that investors fear will jeopardize already fragile recoveries.
“The appetite of authorities in different countries to impose new lockdowns – this is the point of discriminating between good market performance and poor market performance,” said Alessia Berardi, senior economist at Amundi.
“The second wave is now clearly very strong in Europe.”
The MSCI .MIWD00000PUS global stock index, which tracks the stocks of 49 countries, was down 0.6%.
Asian stocks lost ground after initially showing some resilience, in part due to more limited outbreaks of COVID-19 and better recovery in major economies in the region.
The MSCI Asia ex-Japan .MIAPJ0000PUS index lost 0.1%, turning negative even after China .CSI300 and South Korea .KS11 both advanced.
Concerns over a second wave of infections also surfaced in the currency and bond markets, with the euro EUR = EBS falling 0.4% against the dollar. German government bond yields DE10YT = RR hit their lowest since March.
Wall Street had a mixed day on Tuesday, with the S&P 500 .SPX losing 0.3% but the highly technological Nasdaq Composite .IXIC climbing 0.6%.
Apple Inc AAPL.O, Amazon.com AMZN.O and Google-parent Alphabet GOOGL.O report later this week, closely watched as they were among the few winners of the pandemic.
The US presidential election on November 3 adds to the atmosphere of uncertainty.
Former Vice President Joe Biden has had a steady lead over President Donald Trump, prompting investors to bet cautiously on his victory and perhaps a “blue wave” outcome, where Democrats also take over the Senate.
But the Wall Street Volatility Index .VIX, a measure of market expectations for stock price movements, stood at 36.60, its highest since early September.
It is a product of mistrust that the election result itself could be challenged, some market participants say. An unclear result could leave expectations of a US fiscal stimulus package to counter the coronavirus pandemic in limbo.
“It is not yet clear whether we will have a winner at this time (next week) as many state secretaries and polling commissions are hedging their bets on whether they will actually be able to project the winner by Wednesday. morning, “wrote analysts at Deutsche Bank. .
Uncertainty was also apparent in currency markets: One-week implied volatility indicators for the euro and the yen hit their highest level in nearly seven months.
The same measure of volatility for the Chinese yuan CNHSWO = also peaked, reaching its highest level since January 2016.
Against a basket of currencies, the dollar USD = edged up 0.1%.
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Original © Thomson Reuters