Investors took a more cautious tone ahead of the ECB decision announcement
Wall Street stocks saw an impressive bounce overnight, rebounding after a three-day sell-off in the tech sector that pushed the Nasdaq Composite index into correction territory. The S&P 500 index rose the most since June, adding 2.01%. The Dow Jones Industrial Average gained 1.6% while the Nasdaq jumped 2.7%. Tesla stocks also bounced strongly after suffering their biggest selloff.
Asian stocks followed suit and rose on Thursday, but gains were less robust in comparison to the US peers. Furthermore, several indexes turned lower after initial gains. Investors were in part encouraged by hopes of possible additional stimulus from the European Central Bank though no changes in the current monetary policy are expected during today’s meeting. The Shanghai Composite index failed to preserve intraday gains and lost 0.6% by the close. The Nikkei 225 in Tokyo added 0.88% and the Hang Seng in Hong Kong was 0.64% lower.
In Europe, stocks opened little changed but turned lower soon as investors took a more cautious tone ahead of the ECB decision announcement. In London, an emergency meeting is being called on the U.K.’s decision to unilaterally amend its withdrawal agreement, which unnerves regional investors as well. In individual stocks, Morrisons stocks plunged nearly 4.5% after reporting a 25% slump in first-half adjusted pretax profits amid the coronavirus crisis.
Meanwhile, the dollar is lower against most rivals on Thursday as some recovery in risk sentiment has dented the safe-haven USD demand. EURUSD climbed back above the 1.18 handle but refrains from a more robust rebound ahead of the ECB announcement. Should Lagarde highlight the recent rally in the common currency, the pair could turn lower again and finish the day in the red.
Elsewhere, bitcoin has settled around the 100-DMA after a recovery seen on Wednesday. The cryptocurrency is challenging the $10,300 region, trading with a modest bullish bias on the intraday timeframes. Once above $10,400, BTC could see more robust intraday gains in the short term.
