The markets are pressured by a resurgence of virus outbreaks around the globe
Wall Street stocks pared early declines into the close but finished lower on Friday as investors proceeded to profit-taking following the recent rally amid worsening infections and hospitalizations due to pandemic. As a result, the Dow Jones Industrial Average finished the day off 0.4%, the S&P 500 index closed 0.35% lower, while the Nasdaq Composite Index shed less than 0.1%. For the week, the Dow marked a gain of 0.5%, the S&P 500 rose 1.3%, and the Nasdaq Composite jumped 3.1%.
Today in Asia, equities were mostly lower despite the news that a deal had finally been struck on a long-awaited U.S. stimulus bill. The markets were pressured by a resurgence of virus outbreaks around the globe and concerns over a new coronavirus strain that was shutting much of the United Kingdom. Of note, lockdowns were imposed in Australia and Thailand while the Japanese government has suspended a travel promotion program. As such, Tokyo’s Nikkei 225 index lost 0.18% while in Hong Kong the Hang Seng declined 0.72%. In Australia, the S&P/ASX 200 shed 0.08% while the Shanghai Composite index in China bucked the trend and gained 0.76%.
European stock markets opened sharply lower on Monday amid a fast-spreading new variant of the coronavirus that has shut down much of the U.K. The variant is thought to be up to 70% more transmissible than the original strain of the disease. France, Germany, Italy, Ireland, and the Netherlands all barred flights from the U.K. The pan-European Stoxx 600 dropped 1.8% in early trade.
Amid a widespread risk aversion, the safe-haven US dollar switched into a recovery mode to start the week as risk aversion deepened amid virus concerns. As a result, EURUSD dipped to the 1.2170 area earlier in the day but managed to trim losses and regained the 1.2200 figure in recent trading. The fact that buyers reemerge on dips could be a sign of limited downside risks surrounding the common currency at this stage. However, if investor sentiment continues to deteriorate any time soon, the pair will likely struggle.
