· Stock market rally pauses, bonds edge higher on fears of second virus wave
World equity markets slid and safe-haven bonds climbed on Tuesday as rising concerns about a second wave of coronavirus infections outweighed stronger economic data from China and upbeat corporate earnings in Europe.
Stock markets have rebounded sharply in recent weeks as the spread of the novel coronavirus was curbed in the largest economies of Asia and Europe, while parts of the U.S. economy began to reopen after weeks of lockdowns.
MSCI’s gauge of stocks across the globe shed 1.31% following modest advances in Europe and slight losses in Asia.
· Japanese stocks drop as Wall Street slides on virus resurgence fears
Japanese shares dipped further from a two-month high on Wednesday, tracking overnight losses on Wall Street on fears of a second wave of COVID-19 infections, while some profit taking also weighed on the market.
The benchmark Nikkei average fell 0.5% to 20,267.05, with cyclical sectors leading the declines.
Traders said some profit booking was inevitable sooner or later because of the recent rally. On Monday, both the Nikkei and the Topix climbed to their highest levels since March 6.
Investors also kept a watch on simmering U.S.-China tensions after a leading U.S. Republican senator proposed legislation that would authorize President Donald Trump to impose sanctions on China if it fails to give a full account of events leading to the virus outbreak.
The broader Topix pared most of the early losses and ended the session at 1,474.69, just 0.1% lower on the day.
· China stocks end higher as healthcare firms gain; second wave fears weigh
Chinese shares closed higher on Wednesday, reversing course from small losses as a rally in healthcare stocks boosted the index, although gains were capped due to persisting concerns around a potential second wave of COVID-19 cases.
The Shanghai Composite index ended 0.22% higher at 2,898.05, having shed as much as 0.55% during the session.
· European markets fall as coronavirus fears weigh on investor confidence
European stocks opened lower Wednesday as concerns over a second wave of coronavirus infections, and the timing of a vaccine, weighs on investor sentiment.
The pan-European Stoxx 600 dropped 1.1% at the start of trading, with autos falling 1.8% to lead losses as all sectors and major bourses slid into negative territory.
· Virus hit on Europe's corporate profits seen growing further
Expectations for second- and third-quarter corporate profits have deteriorated in Europe, Refinitiv data showed on Wednesday, as fears grow over the extent of the recession triggered by the coronavirus pandemic.
Companies listed on the pan-European STOXX 600 are now expected to report a decline of 46.7% in second-quarter earnings, down from a drop of 44.9% forecast the week before.
For the third quarter, analyst expectations are now set for a 35.1% fall in earnings versus 32.7% a week ago.
While many governments in Europe have announced or started to adopt strategies to gradually ease lockdowns to contain the epidemic, there is little hope the economy will bounce back, let alone return to normal, before the first quarters of 2021.
The last three quarters of 2020 are expected to see STOXX 600 earnings fall by 16.4%, before bouncing back to 27.9% for the first quarter of next year.
· Thailand reports no new coronavirus cases for first time since March 9
Thailand on Wednesday reported no new coronavirus cases for the first time since March 9.
Thailand has a total of 3,017 cases and 56 deaths since the outbreak escalated in January.
The Thai government continues to urge the public to wear masks, practice good hygiene and maintain social distancing measures, said Taweesin Wisanuyothin, a spokesman for the government’s Centre for COVID-19 Situation Administration.
Reference: CNBC, Reuters
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