stock markets

Virus surge, new restrictions batter markets

Agence France-Presse
Virus surge, new restrictions batter markets

People walk by the New York Stock Exchange in Manhattan's financial district in New York City on October 28, 2020. The Dow Jones Industrial Average fell sharply on Wednesday as fears grow over the worsening situation with the coronavirus pandemic's new wave across Europe and parts of America. Stocks on Wall Street fell over 900 points at the close of the trading day. Spencer Platt/Getty Images/AFP


'Grim. That's the only word that can describe the markets on Wednesday,' says analyst Connor Campbell

European and United States stock markets tanked on Wednesday, October 28, while oil prices plunged over 5% as investors braced for tighter lockdown measures to combat soaring coronavirus infection rates, dealers said.

Wall Street’s main indices slumped, with the S&P 500 falling 3.5% at the close, while Frankfurt ended the day down 4.2%, Paris fell by 3.4%, and London lost 2.6%, with sentiment plagued by an alarming surge in COVID-19 cases in Europe and the United States.

More than 500,000 new coronavirus cases were reported worldwide on Tuesday, October 27, in a new record, according to a tally compiled by Agence France-Presse.

French President Emmanuel Macron announced new virus lockdowns that take effect Thursday night, October 29, as doctors warned many hospitals are just days away from being overrun with patients.

The restrictions were unveiled a day after officials announced 523 coronavirus deaths in 24 hours – the highest daily toll since April.

Just after trading ended German Chancellor Angela Merkel also unveiled drastic new curbs, including fresh shutdowns hitting leisure, sports, and the food and drink sectors.

Given up

“Grim. That’s the only word that can describe the markets on Wednesday,” said Spreadex analyst Connor Campbell.

“Investors’ COVID-19 fears [are] attacking stock prices in ways not seen since the start of the Western phase of the pandemic back in March.”

The upsurge in coronavirus fears comes as investors have essentially given up on the chances of a new stimulus package out of Washington.

With US lawmakers unlikely to agree any new rescue package before the presidential election on Tuesday, November 3, analysts said the new wave of virus infections and lingering uncertainty over the vote mean equities will face a wobbly few days.

US gross domestic product is expected to show a record spike of around 30% for the 3rd quarter, but economists warn the big number was fueled by government aid that has now run out, and the gain obscures remaining signs of trouble, especially the slowing pace of recovery.

The government is set to release the first estimate for the quarter at 1230 GMT on Thursday.

Oil dumped

The impact of this year’s lockdowns and travel restrictions was laid bare on Tuesday as the World Tourism Organization said the sector had seen a 70% collapse in business, leading to a $730-billion loss in revenues, while the United Nations’ trade body said foreign direct investment was likely to slump 40%.

Shutdowns also dampen demand for oil, which saw prices tumble more than 5%.

“Dealers were dumping oil as they took the view that demand is likely to decline on the back of the growing health crisis,” said market analyst David Madden at CMC Markets UK.

Key figures around 10 pm GMT
  • New York – Dow: DOWN 3.4% at 26,519.95 (close)
  • New York – S&P 500: DOWN 3.5% at 3,271.03 (close)
  • New York – Nasdaq: DOWN 3.7% at 11,004.87 (close)
  • London – FTSE 100: DOWN 2.6% at 5,582.80 points (close)
  • Frankfurt – DAX 30: DOWN 4.2% at 11,560.51 (close)
  • Paris – CAC 40: DOWN 3.4% at 4,571.12 (close)
  • EURO STOXX 50: DOWN 3.5% at 2,963.54 (close)
  • Tokyo – Nikkei 225: DOWN 0.3% at 23,418.51 (close)
  • Hong Kong – Hang Seng: DOWN 0.3% at 24,708.80 (close)
  • Shanghai – Composite: UP 0.5% at 3,269.24 (close)
  • Euro/dollar: DOWN at $1.1749 from $1.1796 at 9 pm GMT
  • Dollar/yen: DOWN at 104.31 yen from 104.42 yen
  • Pound/dollar: DOWN at $1.2987 from $1.3044
  • Euro/pound: UP at 90.45 pence from 90.43 pence
  • West Texas Intermediate: DOWN 5.6% at $37.39 per barrel
  • Brent North Sea crude: DOWN 5.3% at $39.03 per barrel


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