Wall Street stocks suffered the worst drop in 12 weeks overnight amid the resurgent concerns over a second wave of coronavirus as the number of U.S. cases topped 2 million Thursday. The Dow Jones Industrial tumbled nearly 7%, the S&P 500 sank 5.9%, and the Nasdaq Composite closed down 5.3%. As a reminder, Fed’s Powell said earlier this week that the pandemic could result in permanent economic damage and an extended period of high unemployment.
In Asia, stocks fell as well and finished the week with losses amid the effects of a slump in U.S. markets overnight. Japan’s Nikkei 225 slid 1.5% and Hong Kong’s Hang Seng Index dropped 1.2%. The Shanghai Composite in China slipped 0.7% while Australia’s S&P/ASX 200 dropped 2%.
European stock markets opened in red on Friday but the selling pressure has eased substantially as markets are starting to recover following a sharp sell-off. As such, regional equities are trading marginally lower on Friday and could even enter the positive territory by the end of the session if the selling pressure continues to ebb in the near term.
Elsewhere, European currencies switched into a recovery mode after a decent decline witnessed yesterday amid a widespread risk aversion. EURUSD is now back above the 1.13 handle after a dip to 1.1275. According to the latest reports, the German Economic Adviser said that the government should refrain from imposing another lockdown even if there is a second coronavirus wave. The fact that the decline in the common currency was short-lived and fairly modest (especially considering overnight losses in equity markets), suggests the pair may further regain strength and exceed the 1.14 barrier as soon as risk sentiment improves.
Meanwhile, bitcoin is licking its wounds after yesterday’s plunge to the $9,000 level after failed attempts to challenge the $10,000 key barrier. Today, BTCUSD is changing hands marginally below the $9,500 region but still struggles to make a more decisive recovery.