Global stocks eased for the third day in a row and oil fell, following overnight weakness in Asia and Wall Street as widening COVID-19 restrictions weighed on market sentiment.
Positive news about potential vaccines had helped push the MSCI World Index to an all-time high earlier in the week, only to see investors pull back as a host of countries announced record infection rates and tougher lockdowns .
The broad gauge of global equities traded down 0.3 percent on Thursday morning, while major European indices were down about 0.7 percent. Oil prices also fell as virus restrictions lowered demand expectations.
The weaker sentiment was sparked by a late overnight US liquidation that saw the S&P 500 close 1.1 percent; weighed in by the news, COVID-19 deaths in the world’s largest economy had surpassed 250,000, underpinning a multitude of lockdowns.
Equally grim news in Japan, where a record number of cases and an increase in the pandemic alert level in Tokyo have pushed the Nikkei down 0.4%. The largest MSCI index of Asia-Pacific stocks outside of Japan fell 0.5%.
“The biggest question in the markets right now is whether the headlines of renewed school closures, lockdowns and social restrictions are enough to derail positive vaccines and the fact that COVID survival rates increase with hospitalization and infection rates, ”said a London based trader.
Positive news of the vaccine continued yesterday after Pfizer said its COVID-19 vaccine was 95% effective and would seek emergency clearance in the United States within days, following a Similar recent report from Moderna.
Looking ahead, Wall Street futures point to constant openness, with all eyes on the Federal Reserve for other signs it could step in with yet another monetary stimulus – something two officials have signaled to Wednesday. .
Investors will also wait for US employment data on Thursday.
Against a basket of currencies, the dollar was last at 92.575, marginally in the dark but just off its recent low of 92.129. The euro, meanwhile, was down 0.1 percent and just short of the recent high of US $ 1.1919.
“The vaccine news is a positive medium-term boost to the global economic outlook and investors are trying to weigh this against the prospect of an imminent blockage of the European and US recovery in the run-up to extensions of the lockdown measures current, ”said Rodrigo Catril, senior FX strategist at NAB.
The pound sterling, however, was even weaker, down 0.5% after a report that EU leaders allegedly asked the European Commission to release no-deal plans as the deadline for negotiations on a deal commercial broke down.
Despite the cautious stock markets, gold traders continued to take a longer-term view, betting that COVID-19 vaccines would translate into a faster economic recovery, which would push the yellow metal to a low. of a week.
Bitcoin, sometimes seen as a safe haven or at least a hedge against inflation, also fell and stood for the last time at US $ 17,500.