Market Overview

World stocks ease further from highs, oil dips on COVID-19 count

World stocks eased for the third day in a row and oil fell on Thursday, tracking weakness in Asia and on Wall Street as widening COVID-19 restrictions weighed on market sentiment. Positive news about potential vaccines had helped push the MSCI World Index to a record high earlier in the week, only for investors to pull back as a host of countries announced record infection rates and tougher lockdowns.

At 1053 GMT, the broad gauge of global equities was trading down 0.4% while Europe’s major indexes were down 0.8%-1%. Oil prices also fell 1-1.6% as virus restrictions crimped demand expectations.

The weaker sentiment was triggered by a late U.S. sell-off that saw the S&P 500 close down 1.1% following news that COVID-19 deaths in the world’s biggest economy had passed 250,000, underpinning a host of lockdowns.

Similarly sombre news in Japan, which saw a record number of cases and a rise in Tokyo’s pandemic alert level, sent the Nikkei down 0.4%. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.8%.

The positive vaccine news had continued yesterday after Pfizer said its COVID-19 vaccine was 95% effective and it would apply for emergency U.S. authorization within days, following a similar recent report from Moderna.

Wall Street futures suggested more to come, down 0.3%, with all eyes on the U.S. Federal Reserve for signs it could step in with fresh monetary stimulus — something two officials nodded to on Wednesday. Investors will also await U.S. jobs data at 1330 GMT. Against a basket of currencies the dollar was last at 92.621, near its weekly opening high. Euro/dollar shed 0.2% to last trade at $1.1827.

Sterling weakened, down 0.4% against the dollar and 0.2% per euro, on a report Europe’s leaders would demand the European Commission publish Brexit no-deal plans as the deadline for trade talks go down to the wire. Despite the equity market caution, gold traders continued to take a longer-term view, betting the COVID-19 vaccines would translate into a quicker economic recovery. That sent the precious metal to a one-week low. Bitcoin, sometimes regarded as a safe haven or at least a hedge against inflation, also pulled back and last stood at $17,599.

World stocks ease further from highs, oil dips on COVID-19 count, Reuters, Nov 19

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