Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Shares struggle as coronavirus overshadows China data

Published 10/12/2020, 07:58 PM
Updated 10/13/2020, 07:40 AM
© Reuters. People wearing protective face masks, following an outbreak of the coronavirus, are reflected on a screen showing Nikkei index, outside a brokerage in Tokyo

© Reuters. People wearing protective face masks, following an outbreak of the coronavirus, are reflected on a screen showing Nikkei index, outside a brokerage in Tokyo

UK100
-0.26%
US500
1.09%
DJI
1.18%
JP225
-0.22%
HK50
-0.16%
C
1.13%
BAC
1.82%
GS
2.19%
JPM
1.99%
SPY
0.86%
WFC
2.16%
MS
2.44%
JNJ
0.62%
DX
-0.74%
LCO
0.08%
UK100
-0.76%
ESH25
1.14%
CL
0.12%
EU50
-1.79%
IXIC
1.03%
AX
0.86%
SSEC
-0.06%
USO
0.67%
MIAPJ0000PUS
-1.18%
CSI300
-0.45%
ILS/UAH
-0.61%

By Tom Wilson

LONDON (Reuters) - European shares struggled on Tuesday as worries over the coronavirus pandemic overshadowed Chinese trade data that pointed to a buoyant recovery, while the U.S. dollar edged away from a three-week low.

The Euro STOXX 600 (STOXX) fell 0.4% before trimming losses, with markets in Frankfurt (GDAXI), London (FTSE) and Paris (FCHI) mirroring its moves. It was last down 0.2%, on course to end three straight days of gains.

Keeping markets on edge, traders said, was news that Johnson & Johnson (N:JNJ) was pausing its COVID-19 vaccine candidate clinical trials because of an unexplained illness in a study participant.

Investors see the quick introduction of a vaccine as key to helping economies recover. J&J's move comes after AstraZeneca (L:AZN) paused late-stage trials of its experimental vaccine in September, also due to a participant's unexplained illness.

The travel and leisure (SXTP) and autos (SXAP) sectors suffered, losing 1% and 0.3% respectively after heavier falls in early trading.

Wall Street was also set to lose ground. S&P 500 futures recovered most of their earlier losses to trade down 0.1%.

The risk-off mood contrasted with earlier resilience for Asian markets. They recovered losses after Chinese data showed exports rising 9.9% in September and imports swinging to a 13.2% gain versus a 2.1% drop in August.

The data, which suggests Chinese exporters are recovering from the pandemic's damage to overseas orders, helped MSCI's broadest index of Asia-Pacific shares outside Japan gain 0.2%.

Chinese blue-chip shares (CSI300) added 0.3% after dipping early in the day. Some investors, though, raised questions about how strong consumer demand would prove to be.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

"The question is not necessarily how China's trade is doing per se, but how well will consumers spend on Christmas to give some sense of normalcy amid a period of great stress," said Nordea Investments' Sebastien Galy in a note.

Currency traders were also watching Chinese trade-related issues. Reports that Beijing has stopped taking shipments of Australian coal caused the Australian dollar to drop as much as 0.6% to $0.7165

The MSCI world equity index, which tracks shares in nearly 50 countries, fell 0.1%.

Government bond yields in the euro zone held near recent troughs, with hefty supply failing to dent a market bolstered by expectations for further central bank easing.

Germany's 10-year Bund yield touched -0.538% (DE10YT=RR), its lowest in just over a week. Italian (IT10YT=RR) and Greek (GR10YT=RR) benchmark 10-year debt both hit record lows.

STIMULUS HOPES

Investors increasingly expect Democratic candidate Joe Biden will win the U.S. presidential election next month. That would probably lead to a big stimulus package to help the coronavirus-battered U.S. economy.

"Biden effectively leading in the polls is removing some element of uncertainty," said Jeremy Gatto, an investment manager at Unigestion in Geneva. "In investors' minds, it's not a question of if we get a stimulus, but when."

Some expect a Biden win to undermine the U.S. dollar, since he's pledged to raise corporate tax rates. But the dollar rose 0.2% against a basket of other currencies to 93.214 (=USD), trying to extend a rebound from Friday's near-three-week low of 92.997.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

The Chinese yuan fell 0.1% to 6.7466 per dollar

For Reuters Live Markets blog on European and UK stock markets, please click on: [LIVE/]

Should you invest $2,000 in C right now?

Before you buy stock in C, consider this: ProPicks AI are 6 easy-to-follow model portfolios created by Investing.com for building wealth by identifying winning stocks and letting them run. Over 150,000 paying members trust ProPicks to find new stocks to buy – driven by AI. The ProPicks AI algorithm has just identified the best stocks for investors to buy now. The stocks that made the cut could produce enormous returns in the coming years. Is C one of them?

Reveal Undervalued Stocks Now

Latest comments

beez waxxxxxOct 13, 2020, 21:03
FAKE NEWS ITS THE FLU
Mo CeOct 13, 2020, 18:47
why is corona still a thing, isn't the survivability rate like 99.6%+ across the board for age ranges.
Show all comments
Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.