Stocks try to shake off second wave virus fears

By Administrator_India

Capital Sands

U.S. stock futures erased losses and Asian stocks held flat on Monday, trying to shake off worries that rising coronavirus cases in the United States could scupper a quick economic rebound from the massive downturn triggered by the pandemic.

U.S. S&P 500 futures rose 0.4%, having erased early losses of 1.05% while Japan’s Nikkei also eked out gains of 0.1%, similarly recovering from early losses.

MSCI’s broadest index of Asia-Pacific shares outside Japan was almost flat while mainland Chinese stocks ticked up 0.3% to 3-1/2-month highs.

After a brutal sell-off earlier this year, share prices had risen globally over the past three months, helped by massive stimulus around the world and hopes the worst of the pandemic was over.

Highlighting economic challenges from the impact of social restrictions to contain the pandemic, Apple Inc said on Friday it would temporarily shut 11 U.S. stores as coronavirus cases rise in some states, triggering selling in stocks.

“The second wave is becoming a theme for markets. The increase in states such as Florida and South Carolina is big enough to be labelled as second wave,” said Analyst.

The pandemic is accelerating globally with the World Health Organization (WHO) reporting a record increase in global coronavirus cases on Sunday.

The world’s shares are now traded at the most expensive levels since 2002 compared with projected earnings in the coming 12 months.

Investors are also wary of developments in Hong Kong after details of a new security law for the territory showed Beijing will have overarching powers on its enforcement.

China’s top legislative body, the National People’s Congress Standing Committee, will meet on June 28, and the Global Times reported it would likely enact the Hong Kong security law by July 1.

Hong Kong’s Hang Seng fell 0.3% in early trade, under performing regional markets.

In currencies, major currencies were mostly steady.

The euro traded at $1.1187, near its lowest in nearly three weeks.

The yen changed hands at 106.88 per dollar, not far from a one-month high of 106.58 to the dollar hit earlier this month.

Concerns about the pandemic sent gold 0.8% higher to $1,757.2 per ounce, near its May peak of $1,764.8, which was its strongest since October 2012.

Oil prices firmed slightly on tighter supplies from major producers, but concerns that a record rise in global coronavirus cases could curb a recovery in fuel demand checked gains.

Brent crude rose 0.6% to $42.44 a barrel while U.S. crude was at $40.05 a barrel, up 0.6%.

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