Global stocks going nowhere as virus fears hold optimism in check
By Administrator_India
Asian stock markets ground higher on Friday, and are set to end a choppy week more or less where they began it as surging coronavirus infections cast a shadow over encouraging economic data and checked hopes for a swift global recovery.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%, for a weekly gain of around 0.5%.
Japan’s Nikkei rose 1% to sit flat for the week.
Bulls seem to have the upper hand in currency markets, with the U.S. dollar down 0.3% for the week, and riskier currencies such as the Australian dollar marginally ahead. Majors were steady in morning trade on Friday.
“The market probably ran ahead of itself anticipating a smooth recovery, which has set us up for the rougher period we’re now going through,” said Shane Oliver, chief economist at AMP Capital in Sydney.
“We’re stuck in a bit of a range. There’s a degree of optimism that any second wave will be offset by stimulus … but if we have to go back to a renewed lockdown then it’s a different story, and markets face a lot more downside risk.”
The moves followed a bumpy session on Wall Street, which finished in positive territory after a late surge led by banking stocks. Financials caught a boost from a relaxation in some capital requirements that ought to free up cash for lending.
Still, volumes were light and plenty of headwinds remain.
The governor of Texas paused the state’s reopening on Thursday as COVID-19 infections and hospitalizations surged and the country set a new record for a one-day increase in cases.
Localised restrictions to slow the virus have now been re-imposed in parts of Lisbon in Portugal, western Germany, Australia’s Victoria state and Beijing.
The U.S. Senate has also passed legislation that would impose mandatory sanctions on people or companies that back efforts by China to restrict Hong Kong’s autonomy, yet another potential Sino-U.S. flashpoint.
To become law it must also pass the House and be signed by President Donald Trump.
Hong Kong’s Hang Seng index fell 0.4% in early trade on Friday, after being closed for a holiday on Thursday. Markets in China and Taiwan remain closed.
The U.S. Treasury market was quiet, with the yield on benchmark 10-year Treasuries steady at 0.6790%. Gold held steady at $1,761.39 an ounce.
