Stock markets retreat amid a resurgence of coronavirus infections in China
Wall Street stocks were mostly higher on Thursday, with tech shares leading gains as investors continued to anticipate more fiscal spending to revive economic growth. During yesterday’s meeting, European Central Bank President Christine Lagarde warned the virus continues to pose a serious risk for the region. Policymakers voted to keep pumping unprecedented amounts of stimulus into the economy on Thursday.
Elsewhere, Intel Corp. reported fourth-quarter revenue that topped expectations. The company’s stocks jumped nearly 6.5% following the report. As such, the benchmark S&P 500 index ended up just 0.03%, the Dow Jones Industrial Average lost 0.04%, and the tech-heavy Nasdaq Composite climbed 0.55%.
Asian stock markets retreated on Friday amid a resurgence of coronavirus infections in China. The country reported 103 new infections, its 11th day above 100 confirmed cases. The fact that cases continue to resurge ahead of the Chinese New Year holidays is fueling investor concerns further. As a result, the Shanghai Composite Index lost 0.4% while the Nikkei 225 in Tokyo sank 0.44%. The Hang Seng in Hong Kong fell 1.6%. The Kospi in South Korea lost 0.64% while the S&P/ASX 200 in Sydney shed 0.34%.
In Europe, stocks headed lower at the open as risk aversion prevails during the last trading day of the week. Equities were also hit by tighter travel restrictions in the Eurozone and weak UK retail sales numbers. As such, the pan-European STOXX 600 index fell 0.4% early in the session. On the data front, German Manufacturing PMI arrived at 57.0 in December versus 57.5 expected. Services PMI improved to 46.8 versus 45.3 expected.
Following a mixed report, EURUSD bounced from intraday lows around 1.2150 and turned positive on the day. Still, the pair refrains from a recovery above the important 20-DMA that has been acting as resistance for two weeks already. In the short term, the euro could retain a slightly bullish tone but the upside potential looks limited anyway.