Financial NewsNewsStock Market News

Global stock rally loses steam, Oil gives the gains back

Global stock rally loses steam

Financial Times:

A rally in global stocks faded on Wednesday as new coronavirus outbreaks and geopolitical tensions damped investor optimism stemming from signs of a US economic recovery.

In early Asia-Pacific trading, Japan’s Topix index fell 0.5 per cent and South Korea’s Kospi slipped 0.2 per cent. Equity benchmarks in Hong Kong, mainland China and Australia were little changed.

The cautious mood came as investors eyed gloomy geopolitical developments in the region, including an escalation in tensions on the Korean peninsula and the deaths of at least 20 Indian soldiers during clashes with Chinese troops in the Himalayas. India’s Sensex index slipped 0.5 per cent.

Traders are also monitoring new coronavirus outbreaks in Beijing, with authorities reporting 31 new cases in the Chinese capital as of the end of Tuesday.

“Markets have quickly built [in] expectations of a quick recovery in China in recent weeks and the incoming data has also been supportive,” said Johanna Chua, an emerging Asia economist at Citi. “If the spread of infection in and beyond Beijing continues in days and weeks ahead, then markets may be forced to re-think such expectations.”

Meanwhile, data showed the biggest fall in Japanese exports in more than a decade during May, raising concerns over how quickly the world’s third-biggest economy can recover from the Covid-19 pandemic.

Overnight on Wall Street, the S&P 500 closed 1.9 per cent higher after figures showed a record rebound in US retail sales in May as states began easing coronavirus-induced lockdowns.

US markets were also boosted by reports of a $1tn infrastructure spending package and research that suggested a cheap steroid can reduce deaths from coronavirus.

But Jay Powell, the Federal Reserve chairman, warned Congress of “significant uncertainty” surrounding the “timing and strength” of the US economic recovery, even as he reiterated that the central bank remained “committed to using our full range of tools to support the economy in this challenging time”.

Futures markets tipped the S&P 500 to shed 0.2 per cent when trading begins later on Wednesday. London’s FTSE 100 was expected to rise 0.3 per cent James Knightley, chief international economist at ING, said that while the jump in US retail sales was encouraging, “we cannot signal the all clear until Covid-19 is beaten, or at least properly contained”. He added: “The recent spike in new cases in several [US] states suggests we need to make much more progress here, with the threat that renewed lockdowns could have a massive impact.” A rally in global markets this week has been supported by the Fed’s announcement that it would begin purchasing a “broad and diversified portfolio” of individual corporate bonds, extending existing measures intended to support the economy during coronavirus

. Oil prices slipped on Wednesday after rising a day earlier. Brent crude, the international benchmark, fell 1.7 per cent to $40.26 a barrel. US marker West Texas Intermediate dropped 2.2 per cent to $37.55.

Subscribe to our premium packages if you would like to get 1000+ instruments analysis and trade signals of Chartreadreadepro.





You can contact us via Skype User Name: Chartreaderpro

DISCLAIMER: This is a technical analysis study, not advice or recommendation to invest money

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress.

Show More

Related Articles

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.