Stocks sell-off as coronavirus surge knocks recovery hopes

Stocks sell-off as coronavirus surge knocks recovery hopes

By Administrator_India

Capital Sands

Asia’s stock markets slipped, bonds rose and the U.S. dollar was firm on Thursday as surging U.S. coronavirus cases, global trade tensions and an International Monetary Fund downgrade to economic projections knocked confidence in a recovery.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.7%, Tokyo’s Nikkei slumped 1.4% and Australia’s ASX 200 tumbled 1.8%. U.S. stock futures also declined 0.7% following on from an overnight slide on Wall Street.

Markets in Hong Kong and mainland China are closed for public holidays on Thursday.

Florida, Oklahoma and South Carolina reported record increases in new cases on Wednesday. Seven other states had record highs earlier in the week and Australia posted its biggest daily rise in infections in two months.

The governors of New York, New Jersey and Connecticut ordered travellers from nine other states to quarantine on arrival, a worry for investors who had mostly been expecting an end to pandemic restrictions.

Texas is also facing a “massive outbreak” and authorities are considering localised restrictions, Governor Greg Abbott said in a television interview.

Australian airline Qantas said on Thursday it doesn’t expect sizeable international operations until at least July 2021, as the carrier announced plans to sack a fifth of its workforce and raise $1.3 billion to stay afloat.

The International Monetary Fund said it now expects a deeper global recession, with output to shrink 4.9% this year, much sharper than the 3.0% contraction predicted in April.

“There is a little bit of reality bites coming,” said Damian Rooney, senior instructional salesman at stockbroker Argonaut in Perth.

“I don’t think there was a particular straw that broke the camel’s back, but people are a little bit twitchy – there are a lot of reasons to be pretty cautious.”

Oil prices, a proxy for global energy consumption and economic growth, nursed losses following a 5% tumble overnight as U.S. crude storage hit another record and demand worries resurfaced.

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