Asian markets sag on coronavirus, US election worries

Reuters TOKYO | Updated on October 28, 2020

Global shares slipped on Wednesday as coronavirus infections grew at an alarming pace in the United States and Europe, while uncertainty over next week's US elections added to a “risk off” tone.

MSCI's ex-Japan Asia index dipped 0.15% in early trade while Japan's Nikkei fell 0.6%.

Japanese shares fell on Wednesday, pulled down by worries that surging coronavirus cases in Europe and the United States could further damage an already-battered global economy.

The benchmark Nikkei share average fell 0.32% to 23,410.75, while the broader Topix lost 0.61% to 1,607.61.

Futures for US S&P500, Dow Jones and Nasdaq all fell 0.5%-0.6% in Asian trade on Wednesday, rattled by a media report that French government may bring in a national lockdown from midnight on Thursday.

Covid-19 cases

The United States, Russia, France and other countries have registered record numbers of infections in recent days, and European governments have introduced new curbs to try to rein in the fast-growing outbreaks. Data on Tuesday showed U.S. consumer confidence unexpectedly fell in October, although other economic figures were mostly positive, with orders for key capital goods hitting a six-year high.

The fall in US stock futures came after a mixed session on Wall Street, where the S&P 500 lost 0.30% on virus worries while the tech-heavy Nasdaq Composite added 0.64%.

Microsoft kicked off a slate of reporting from tech heavyweights by beating Wall Street estimates for quarterly revenue, buoyed by its flagship cloud computing business amid increased work-from-home arrangements. But its shares slipped 1.7% after the bell.

Apple Inc,, and Google-parent Alphabet are among major tech players reporting later this week.


Wall Street's volatility index, a measure of market expectations in share price swings, rose to 33.35, its highest in almost two months.

Some market players see that as a sign more investors are wary of the possibility that the election outcome can be contested, possibly leaving markets in limbo for weeks.

That would likely further delay any negotiation on economic relief package U.S. policymakers have been struggling to agree on. Trump acknowledged an economic relief package would likely come after the Nov. 3 election.

In the currency market, the euro edged lower on concerns about a possible lockdown in France, trading at $1.1779, down 0.15%.

The safe-haven yen is well supported at 104.42 yen per dollar, not far from its six-month high of 104 touched last month.

Investors also bought back US Treasuries, another safe-haven asset, pushing down their yields.

The benchmark 10-year yield dropped to 0.766%, down 1.2 basis point so far on Wednesday and way below its 4 1/2-month high of 0.872% hit on Friday.

Gold was little changed at $1,906.0 per ounce.

Oil prices gave up much of their gains made the previous day as a jump in U.S. crude inventories and surging COVID-19 cases raised fears of an oversupply of oil and weak fuel demand.

Published on October 28, 2020

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