TOKYO (Reuters) – Global stocks plummeted on Wednesday as coronavirus infections rose at an alarming rate in the United States and Europe, while uncertainty over next week’s US election added to a tone of “risk reduction.”
European stocks appear to collapse amid reports of potential blockages in Germany and France with Euro Stoxx 50 futures STXEc1
Futures for American S & P500 SC1, Dow Jones YMc1 and Nasdaq NQc1 all fell 0.2-0.4%, shaken by a media report that the French government could introduce a national lock from midnight on Thursday.
Meanwhile, the German newspaper Bild reported that Chancellor Angela Merkel wants to close all restaurants and bars and some other places from November 4 in an attempt to control new infections.
The United States, Russia, France and other countries have registered record numbers of infections in recent days, and European governments have imposed new restrictions.
Stocks in Asia performed better, thanks in part to the more limited outbreaks of COVID-19. The Japanese Nikkei .N225 fell 0.4% while the former Japanese MSCI index in Asia .MIAPJ0000PUS achieved a profit of 0.1% due to profits in China .CSI300 and South Korea .KS11.
“The relative strength of the Japanese and Asians clearly reflects the difference in coronavirus infections,” said Naoya Oshikubo, a senior economist at Sumitomo Trust Asset Management.
The decline in US stock futures came after a mixed session on Wall Street, where the S&P 500 .SPX lost 0.30% of viral worries while the technological Nasdaq Composite .IXIC adds 0.64%.
Microsoft MSFT.O began reporting on technical burdens, surpassing Wall Street’s quarterly revenue forecasts, backed by its leading cloud computing business amid heightened homework arrangements. But his shares fell 1.7% after the bell.
Apple Inc. AAPL.O, Amazon.com AMZN.O, and the Google parent alphabet GOOGL.O are among the major technology players who report later this week.
MEMORY FOR 2016
Investors shunned the risk of imminent uncertainty over the November 3 US presidential election.
As former Vice President Joe Biden enjoyed a consistent lead over President Donald Trump, investors were wary of his victory and possibly the outcome of the Blue Wave, where Democrats take back the Senate.
However, the presidential race is closer in the states on the battlefield, which can determine the outcome, leaving many investors on the brink.
“It seems that the gap between Biden and Trump has narrowed a bit lately. In particular, Biden’s leadership in the swing states does not look so different from that of (Democratic candidate) Hillary Clinton in 2016, “said Nobuhiko Kuramochi, market strategist at Mizuho Securities.
“People still remember the experience of 2016, and those who bet on the blue wave are likely to make some profits before the event,” he added.
Wall Street Volatility Index .VIX, an indicator of market expectations in stock price fluctuations, rose to 33.35, the highest in almost two months.
Some market participants see that, as a sign, more investors are wary that the election results could be challenged, possibly leaving markets stagnant for weeks.
This is likely to further delay any negotiations on an economic relief package. American politicians are trying to reach an agreement. Trump acknowledged that the economic easing package is likely to come after the election.
In the foreign exchange market, the euro fell lower due to concerns about a possible blockade in France, trading at $ 1.1783, by 0.1%.
The yen in safe havens gained 0.2% to 104.22 yen per dollar JPY =, not far from its six-month high of 104, touched last month.
The yuan fell against the dollar after some banks changed the methodology for setting the daily average of the yuan, a new sign that Beijing may be trying to slow a 6% rally in the Chinese currency from late May.[CNY/]
Investors also bought back the US Treasury Department, another secure asset, reducing its profitability.
The standard is 10 years old US10YT = RR yields fell to 0.769%, falling to 1.2 basis points so far on Wednesday and well below its 4 1/2-month high of 0.872% reached on Friday.
Gold changed slightly to $ 1,906.0 per ounce XAU =.
Oil prices gave up much of their previous day’s gains as a jump in US crude inventories and rising COVID-19 cases raised fears of oil oversupply and weak fuel demand.
Up to 0550 GMT, raw Brent variety LCOc1 traded 1.6% to $ 40.53 a barrel, while US crude oil CLc1 fell 2.1% to $ 38.75 a barrel.
Reporting by Hideyuki Sano; additional reporting by Pete Schröder; edited by Richard Pullin