· Stocks sell off as coronavirus surge knocks recovery hopes
Asian stocks posted their biggest drop in eight sessions, bonds rose and the U.S. dollar was firm on Thursday as surging U.S. coronavirus cases and an International Monetary Fund downgrade to economic projections knocked confidence in a recovery.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.7%, Tokyo’s Nikkei slumped 1.1% and Australia’s ASX 200 tumbled 2.1%.
U.S. stock futures declined 0.4%, suggesting Wednesday’s Wall Street slide might have further to run. In Europe, however, where strong data has supported risk appetite this week, futures were only marginally in the red.
Florida, Oklahoma and South Carolina reported record increases in new cases on Wednesday. Seven other states had record highs earlier in the week and Australia posted its biggest daily rise in infections in two months.
The governors of New York, New Jersey and Connecticut ordered travellers from eight other states to quarantine on arrival, a worry for investors who had mostly been expecting an end to pandemic restrictions.
Disney has delayed the re-opening of theme parks and resorts in California, while Texas is facing a “massive outbreak” and considering new localised restrictions, Governor Greg Abbott said in a television interview.
· Japanese shares hit 1-1/2-week low on virus resurgence fears
Japanese stocks ended at a more than one-week low on Thursday, tracking losses on Wall Street, as rising coronavirus cases in the United States and many other countries dented hopes of a quick global economic recovery.
The benchmark Nikkei average fell 1.2% to 22,259.79, its lowest closing level since June 15.
Highly cyclical air transport, non-ferrous metals and iron and steel were among the worst performing sectors on the main bourse.
The broader Topix shed 1.2% to 1,561.85, its lowest closing since June 15, with all but one of the 33 sector sub-indexes on
· European markets fall after IMF slashes economic forecasts again; Wirecard down another 13%
European stocks retreated Thursday as investors digested the latest economic forecasts from the International Monetary Fund (IMF) and a record spike in coronavirus cases in the U.S.
The pan-European Stoxx 600 slid 0.9% in early trade, with travel and leisure stocks falling 1.7% to lead losses as all sectors and major bourses entered negative territory.
Global markets continue to digest the IMF’s latest forecast for the global economy and warning of soaring debt levels. On Wednesday, the IMF released its latest outlook in which it forecast a contraction of 4.9% in global gross domestic product in 2020, lower than the 3% fall it predicted in April.
The fund also downgraded its GDP forecast for 2021. It now expects a growth rate of 5.4%, down from a forecast of 5.8% made in April. The fund said that the downward revisions were due to social distancing measures likely remaining in place during the second half of the year, with productivity and supply chains being hit.
At the bottom of the European blue chip index, Wirecard tumbled another 13.7% amid an ongoing investigation over the $2.1 billion missing from the German payment company’s accounts.
Reference: CNBC, Reuters
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