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Shares struggle as coronavirus overshadows China data

EconomyOct 13, 2020 07:40AM ET
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2/2 © Reuters. People wearing protective face masks, following an outbreak of the coronavirus, are reflected on a screen showing Nikkei index, outside a brokerage in Tokyo 2/2

By Tom Wilson

LONDON (Reuters) - European shares struggled on Tuesday as worries over the coronavirus pandemic overshadowed Chinese trade data that pointed to a buoyant recovery, while the U.S. dollar edged away from a three-week low.

The Euro STOXX 600 (STOXX) fell 0.4% before trimming losses, with markets in Frankfurt (GDAXI), London (FTSE) and Paris (FCHI) mirroring its moves. It was last down 0.2%, on course to end three straight days of gains.

Keeping markets on edge, traders said, was news that Johnson & Johnson (N:JNJ) was pausing its COVID-19 vaccine candidate clinical trials because of an unexplained illness in a study participant.

Investors see the quick introduction of a vaccine as key to helping economies recover. J&J's move comes after AstraZeneca (L:AZN) paused late-stage trials of its experimental vaccine in September, also due to a participant's unexplained illness.

The travel and leisure (SXTP) and autos (SXAP) sectors suffered, losing 1% and 0.3% respectively after heavier falls in early trading.

Wall Street was also set to lose ground. S&P 500 futures recovered most of their earlier losses to trade down 0.1%.

The risk-off mood contrasted with earlier resilience for Asian markets. They recovered losses after Chinese data showed exports rising 9.9% in September and imports swinging to a 13.2% gain versus a 2.1% drop in August.

The data, which suggests Chinese exporters are recovering from the pandemic's damage to overseas orders, helped MSCI's broadest index of Asia-Pacific shares outside Japan gain 0.2%.

Chinese blue-chip shares (CSI300) added 0.3% after dipping early in the day. Some investors, though, raised questions about how strong consumer demand would prove to be.

"The question is not necessarily how China's trade is doing per se, but how well will consumers spend on Christmas to give some sense of normalcy amid a period of great stress," said Nordea Investments' Sebastien Galy in a note.

Currency traders were also watching Chinese trade-related issues. Reports that Beijing has stopped taking shipments of Australian coal caused the Australian dollar to drop as much as 0.6% to $0.7165 .

The MSCI world equity index, which tracks shares in nearly 50 countries, fell 0.1%.

Government bond yields in the euro zone held near recent troughs, with hefty supply failing to dent a market bolstered by expectations for further central bank easing.

Germany's 10-year Bund yield touched -0.538% (DE10YT=RR), its lowest in just over a week. Italian (IT10YT=RR) and Greek (GR10YT=RR) benchmark 10-year debt both hit record lows.

STIMULUS HOPES

Investors increasingly expect Democratic candidate Joe Biden will win the U.S. presidential election next month. That would probably lead to a big stimulus package to help the coronavirus-battered U.S. economy.

"Biden effectively leading in the polls is removing some element of uncertainty," said Jeremy Gatto, an investment manager at Unigestion in Geneva. "In investors' minds, it's not a question of if we get a stimulus, but when."

Some expect a Biden win to undermine the U.S. dollar, since he's pledged to raise corporate tax rates. But the dollar rose 0.2% against a basket of other currencies to 93.214 (=USD), trying to extend a rebound from Friday's near-three-week low of 92.997.

The Chinese yuan fell 0.1% to 6.7466 per dollar , after the central bank set a weaker-than-forecast midpoint, offsetting any boost from the trade data.

For Reuters Live Markets blog on European and UK stock markets, please click on: [LIVE/]

Shares struggle as coronavirus overshadows China data
 

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Comments (17)
beez waxxxxx
beez waxxxxx Oct 13, 2020 1:03PM ET
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FAKE NEWS ITS THE FLU
Mo Ce
Mo Ce Oct 13, 2020 10:47AM ET
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why is corona still a thing, isn't the survivability rate like 99.6%+ across the board for age ranges.
TL Chan
TL Chan Oct 13, 2020 3:58AM ET
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Yes, full of fake news, fund houses just want your retail investor's money, all this overall image and sentiments are piled up so artificially in such a no-shame manner! Sad!
Kaveh Sun
Kaveh Sun Oct 13, 2020 1:39AM ET
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Everything is up as i speak. Fake news
perplexed76 .
perplexed76 . Oct 13, 2020 1:39AM ET
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news has nothing to do with your up. Shrugging off everything bad - the motto of todays markets.
Kaveh Sun
Kaveh Sun Oct 13, 2020 1:39AM ET
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perplexed76 . Reuters said asian shares slipped. But they r not.
perplexed76 .
perplexed76 . Oct 13, 2020 1:39AM ET
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Kaveh Sun  shares might be positive during one hour. It's so rare that they had to write about it.
Kaveh Sun
Kaveh Sun Oct 13, 2020 1:39AM ET
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perplexed76 . After 1 huge day up, the next day open down is expected. Tomorrow us market is expected to open down. There is nothing to write about it.
perplexed76 .
perplexed76 . Oct 13, 2020 1:39AM ET
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Kaveh Sun  have a look at futures. They were -0.5%, now about zero. absurd rally continues
Jack Sharma
Jack007 Oct 12, 2020 10:57PM ET
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Asian market fell
Seth Gray
Seth Gray Oct 12, 2020 10:46PM ET
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Stimulus hopes in every daily headline. This will be a data point in a white paper 10 years from now....
Samui Lo
Samui Lo Oct 12, 2020 10:44PM ET
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Every day stimulus "hope" +300pts, but stimulus disappointment for past 2 months doesn't matter
Attila Bakk
Attila Bakk Oct 12, 2020 10:37PM ET
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The big short ahead of election
Dan Hodel
Dan Hodel Oct 12, 2020 10:30PM ET
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Americans have witnessed first hand, that asian investors have Bought America. It’s happening on Trump’s watch. Is America great?
Mario tragik
Mario tragik Oct 12, 2020 10:19PM ET
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stimulus hopes .... okay. Big money does not go on hopes. These headlines are to fool the gullible retail investor.
Jerry Chan
Jerry Chan Oct 12, 2020 9:55PM ET
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f a k e news
Thom Miller
Thom Miller Oct 12, 2020 9:53PM ET
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Saturday, May 3Otto Gonzalez, a 35-year-old homeless man, was arrested at 9:07 p.m. Saturday and charged with drinking alcohol in public and disturbing the peace.
vijay anand
vijay anand Oct 12, 2020 9:51PM ET
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only tech stocks ll might be positive .Indian market flat open and then fall expected . without correction no further up movement.
Ali Rahimi
Ali Rahimi Oct 12, 2020 9:42PM ET
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rise?????
Mani Arora
Mani Arora Oct 12, 2020 9:35PM ET
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indian stock markit down open hogi ya up open hogi sir
Gold Fever
Gold Fever Oct 12, 2020 9:26PM ET
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Huh? Asian markets all red.
Jerry Chan
Jerry Chan Oct 12, 2020 9:26PM ET
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Asian stocks actually fall
 
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