Wall Street stocks finished higher on Friday but suffered the deepest losses since the March sell-off as the resurgent concerns over a second wave of the coronavirus pandemic made investors reassess their expectations over the economic recovery. The Dow Jones gained 1.9%, the S&P 500 index added 1.3%, and the Nasdaq Composite Index climbed 1%. However, for the week, the Dow lost 5.55%, the S&P 500 declined by 4.8%, and the Nasdaq shed 2.33%.
Today in Asia, equities fell nearly across the board, with South Korea’s Kospi plunging 4.76% and the Nikkei 225 in Japan fell more than 3%. Overall, the MSCI Asia ex-Japan index dipped 2.21%. a rise in new virus cases in China added to the negative sentiment among investors. Also, fresh economic data out of Beijing disappointed, fueling fears about another blow to the economy from the ongoing pandemic. In particular, industrial production rose 4.4% year-on-year in May, less than expectations of a 5% increase while retail sales declined 2.8% year-on-year, worse than expectations of a 2% decrease.
European stocks also slumped on Monday on concern over rising coronavirus infections. In recent trading, equities managed to trim losses as risk aversion has abated somehow. Still, stocks remained lower on the day as virus-related worries prevented markets from a more robust recovery.
Elsewhere, the euro is marginally higher on the day but still struggles to show a more sustainable recovery following a two-day sell-off. EURUSD failed to challenge the 1.1270 intermediate resistance in recent trading and has retreated partially since then. Despite a bullish intraday bias, the 1.12 handle remains in market focus as downside risks continue to persist amid the prevailing risk aversion.
In other markets, bitcoin price failed to break above the $9,400 region and accelerated the retreat after a dip below the 50-DMA. Moreover, BTCUSD briefly plunged to the $8,800 support area and bounced above $9,000 afterwards. Despite the downside potential looks limited at this stage, the cryptocurrency number one is yet to hold above the $9,000 handle on a daily basis.
