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Equities mostly down as virus ebbs and flares around world

26 August 2020, MVT 17:46
A pedestrian walks past an electronic quotation board displaying share prices of the Tokyo Stock Exchange in Tokyo on June 16, 2020. (Photo by Kazuhiro NOGI / AFP)
26 August 2020, MVT 17:46

Most markets in Asia slipped Wednesday as investors weighed worries about the economic impact of coronavirus and fresh outbreaks in some countries against signs it is easing in other parts of the world and hopes for a vaccine.

Wall Street provided a third-successive record-breaking lead, with tech firms unmoved by a sharp drop in confidence in the crucial US consumer sector, while easing China-US trade fears provided support.

Michael Hewson of CMC Markets noted US traders were also "helped by optimism ahead of Federal Reserve chairman Jerome Powell’s speech later this week, which is likely to reinforce the US central bank’s commitment to do whatever it takes to support the US economy, at this very challenging time".

The closely watched Conference Board index saw a sharp drop in July to a six-year low, with views on future expectations and the present both down after a summer spike in infections across the US Sun Belt, suggesting little chance of improvement any time soon.

"Disappointment over the lack of another fiscal package supporting incomes, still choppy news on the virus and last week's jobless news were not that comforting, either," said National Australia Bank's Ray Attrill.

"This reading puts consumer confidence back to pandemic lows."

And while there are signs the disease is levelling off in the US, other countries are fighting to subdue new flare-ups, with Spain calling in the army to try to help curb a spread and South Korea again closing schools and kindergartens in the greater Seoul region.

Observers warned the upcoming winter could see more infections as people are forced to stay indoors.

Shanghai dropped more than one percent, while Sydney eased 0.7 percent.

Mumbai and Tokyo were marginally lower, while Singapore, Manila and Jakarta were also in the red.

Hong Kong barely moved, while Seoul, Taipei, Wellington and Bangkok were slightly higher.

In Europe, London was lower in early trade, though Paris and Frankfurt bounced from initial losses.

"The situation is still far better than it was in the spring with more asymptomatic cases and much broader testing," said AxiCorp's Stephen Innes.

"However, recent momentum and outbreaks around the world are worrying, as second and third-wave coronavirus outbreaks still pose the most significant threat to the economic recovery."

But he added tech firms would likely continue to be well supported as people work, study and shop from home as fresh containment measures are imposed.

Oil prices held on to Tuesday's big gains as Hurricane Laura threatens installations in the Gulf of Mexico, with the commodity sitting around highs not seen since early March.

Hong Kong, China | AFPo

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