Sat, 28 Nov 2020

Stock markets flat as virus cases spike

23 Oct 2020, 00:43 GMT+10

Global stock markets were steady Thursday following sharp losses the previous session, with investors spooked by a sharp rise in coronavirus cases and continued uncertainty over a pre-election stimulus package in Washington.

Oil was firmer, along with the dollar, while the pound slipped after gains made on hopes that on-off-on-again post-Brexit trade talks might finally make some progress.

Better-than-expected new US jobless benefit claims were welcomed but analysts said the underlying economic situation remained concerning and made the case for a fresh stimulus package all the more pressing.

"With fiscal relief package hopes dimming, this situation is worrisome," Gregory Daco of Oxford Economics tweeted.

David Madden, analyst at CMC Markets UK, said that while investors expect some sort of a package eventually "there isn't much hope that it will be achieved soon."

The deadlock in Washington over the stimulus package comes as coronavirus cases surge across the US, with many Americans already struggling and observers fearful the economy could be hit badly.

The White House has said it will agree to a $1.9-trillion package but that is $300 billion short of what Democrats have put forward and much more than many Republicans are willing to swallow.

Analysts said markets have been jolted also by US Director of National Intelligence John Ratcliffe's revelations that Russia and Iran have meddled in the election run-up, sending "spoofed" emails to Americans "designed to intimidate voters, incite social unrest, and damage President Trump".

The claims will likely lead to fresh concerns about the result being contested, which could drag on for weeks and cause uncertainty on markets.

Pound retreats

The pound gave up some of the strong gains won Wednesday against the dollar and euro on hopes of a post-Brexit trade deal between Britain and the European Union.

EU negotiators headed to London on Thursday to resume talks after Britain called off a boycott, with both sides vowing to work round the clock to seal a deal in the short time left.

Britain meanwhile on Thursday said it had agreed a provisional trade deal with Norway, Switzerland and two other non-EU partners to ensure continuity after its Brexit divorce from the European Union.

Source: News24

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