Global 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.

Data from Johns Hopkins University shows new U.S. cases on Saturday hit the highest since early May.

The pandemic is accelerating globally with the WHO reporting a record increase in global coronavirus cases on Sunday.

“The market has been pricing in a rapid recovery so I doubt there are much upside gains to be made. We now need to see whether the earnings outlook will meet up with expectations,” said Takuya Hozumi, investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

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.

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

In currencies, major currencies were mostly steady.

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