Global stock markets mixed as rally fades

NEW YORK -- Stock markets diverged Wednesday as a global rally faded, despite more data that soothed fears of a further rise in US interest rates.

Wall Street closed higher as private sector hiring data came in softer than expected, while second quarter GDP growth was revised down to 2.1 percent on an annual measure.

The latest figures and other weaker numbers revealed on Tuesday "appear to be adding weight" to the idea of a pause in rate hikes by the US Federal Reserve next month, said CMC Markets UK analyst Michael Hewson.

This adds to "further downward pressure on yields," he said. Lower yields on bonds tend to boost stocks as they signify lower borrowing costs for companies.

Fed chief Jerome Powell said last week the US central bank stands ready to hike interest rates further, having already pushed them to a 22-year high to tame prices, if data shows the US economy continues to grow strongly and price pressures persist.

But the Fed's data-dependent approach is also seen as keeping the possibility open that interest rates may not go any higher if the world's largest economy cools.

That set off strong gains at the beginning of the week, particularly after Tuesday's report on US job openings, which was softer than anticipated. Analysts said it would give monetary policymakers room to hold off on lifting borrowing costs again.

"Signs of America's cooling economy have raised hopes that the pause button will be pushed on punishing interest rate hikes," noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.

But with stocks having posted solid gains in recent days, the rally may be running out of steam.

"We suspect traders might be showing some hesitation, thinking that this heady action can't persist or, at least, opting to wait and see if it does," said analyst Patrick O'Hare at Briefing.com.

On Wednesday, the Dow closed 0.1 percent higher while the S&P 500 rose 0.4 percent.

Investors may also be showing caution as more data is due later this week, including the Fed's preferred gauge of inflation -- the personal consumption expenditures price index -- as well as US government payrolls data.

"Today's data was never likely to be overly impactful with tomorrow's inflation, income, and spending figures, prior to Friday's payrolls, always the primary focus," said analyst Craig Erlam of OANDA.

"That could well set the tone for September ahead of some major central bank meetings," he added in a note.

In Europe, London stocks rose while Frankfurt and Paris fell. Tokyo closed higher, but Shanghai and Hong Kong flattened.

Focus was also on China after a report said its biggest state-backed banks would slash rates on mortgages and deposits as part of a drive to support the country's beleaguered property sector.

And after Asian markets closed, China's embattled real estate giant Country Garden reported losses of approximately $6.7 billion for the first half of this year while warning of possible default.

The company's cash flow problems have ignited fears that it could collapse and spread turbulence through China's economy and financial system.

Agence France-Presse

Global stocks fall as Euro hits new 20-year low

NEW YORK, United States - Global stocks were down Tuesday as the euro dove to a new two-decade low against the dollar and traders waited nervously for news on the next US interest rate hikes.

The single currency tumbled to $0.9901, but later clawed back losses as the greenback was hit by poor US economic data.

The dollar had strengthened this week against other currencies ahead of a speech Friday by US Federal Reserve chief Jerome Powell, as markets speculate that the central bank will continue tighten its monetary policy.

Higher interest rates boost the American currency as they make dollar-denominated debt more attractive to investors.

But the euro also has been weighed down by a gloomy outlook for the eurozone economy as Russia's war in Ukraine has sent energy prices soaring.

The unit plunged below parity with the dollar Monday on recession fears to plumb the lowest levels since 2002, when it first came into physical circulation.

In the latest blow, S&P Global's closely watched monthly composite purchasing managers' index (PMI) showed that eurozone economic activity fell for the second month in a row in August.

'Investors are bracing' 

Wall Street indices ended mostly lower, with the Dow Jones falling 0.5 percent.

With the Jackson Hole central banking symposium this week, the focus is on what Fed chief Powell says about plans to tackle high prices, with many fearing officials could send the economy into recession.

"I think that investors are bracing for some hawkish commentary from Fed chair Powell this coming week," said Jack Ablin of Cresset Capital.

European equities and Asian markets also slid amid stubborn worries about the Fed's movements.

US natural gas prices meanwhile hit a fresh 14-year high on Tuesday at $10.028.

But across the Atlantic, European natural gas prices fell, although they remain elevated on fears of a halt to Russia's gas deliveries. The Dutch TTF Gas Futures contract stood at 268.45 euros down from Monday.

Gas had spiked to record peaks in March after key producer Russia launched its invasion of neighboring Ukraine.

That has sparked surging domestic energy bills, fueling decades-high inflation that has prompted tighter monetary policy around the world.

Moscow's maneuvers have hit the single currency hard because the bloc relies heavily on imported Russian gas, said Societe Generale analyst Kit Juckes. 

Fears increased after Russia's Gazprom said Friday the Nord Stream pipeline would be closed for maintenance at the end of the month, cutting Europe's crucial gas deliveries.

"The euro's problem is... the threat from continued squeezing of gas supplies and the cost of replacing Russian gas," Juckes said.

Oil prices -- which have fallen for weeks as recession worries hit demand expectations -- rebounded after Saudi Arabia suggested OPEC and other major producers could cut output citing "volatility" in crude markets.

Key figures at around 2030 GMT

New York - Dow: DOWN 0.5 percent at 32,909.59 points (close)

New York - S&P 500: DOWN 0.2 percent at 4,128.73 (close)

New York - Nasdaq: UNCH at 12,381.30 (close)

EURO STOXX 50: DOWN 0.2 percent at 3,652.52 (close)

London - FTSE 100: DOWN 0.6 percent at 7,488.11 (close)

Frankfurt - DAX: DOWN 0.3 percent at 13,194.23 (close)

Paris - CAC 40: DOWN 0.3 percent at 6,362.02 (close)

Tokyo - Nikkei 225: DOWN 1.2 percent at 28,452.75 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 19,503.25 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,276.22 (close)

Euro/dollar: UP at $0.9973 from $0.9943 Monday

Pound/dollar: UP at $1.1835 from $1.1767

Euro/pound DOWN at 84.25 pence from 84.98 pence

Dollar/yen: DOWN at 136.7710 yen from 137.48 yen

West Texas Intermediate: UP 3.7 percent at $93.74 per barrel

Brent North Sea crude: UP 3.9 percent at $100.22

Agence France-Presse

Wall Street bounces from Omicron selloff as Nike, Micron lead gains

Wall Street's main indexes rose more than 1 percent on Tuesday, boosted by Nike and Micron following strong earnings, while beaten-down big technology stocks bounced back from an Omicron-driven rout in the previous session.

The rapidly spreading variant of the coronavirus has rattled stock markets around the world, triggering major sell-offs in the final month of the year due to worries about the strain's impact on a global economic recovery.

Nike Inc rose 6.6 percent, boosting the Dow Jones Industrial Average. It beat quarterly estimates for profit and revenue, and sounded confident of a letup in supply chain problems in its next fiscal year.

Micron Technology Inc, up 9.5 percent, led the advance among chipmakers after it forecast upbeat second-quarter earnings and topped Wall Street expectations for quarterly profit and revenue.

The two companies positive updates helped allay some concerns about broader supply chain constraints in a high inflation environment, which has become a cause for concern for central banks globally.

Ten of the 11 major S&P 500 sectors rose in early trading, while the Philadelphia SE Semiconductor index gained 1.7 percent.

"We got oversold yesterday and we are bouncing back a little bit today," said Dennis Dick, a proprietary trader at Bright Trading LLC in Las Vegas.

"This market is more of a dead cat bounce as opposed to this new bull market that is going to rage into 2022. There are just too many concerns."

Mega-cap growth firms, including Tesla Inc, Microsoft Corp, Apple Inc, Amazon.com Inc , Meta Platforms and Alphabet Inc rose between 0.4 percent and 1.7 percent after taking a beating on Monday.

Investors have taken a more defensive stance this month, with sectors such as consumer staples, real estate and utilities among top gainers.

Most of the defensive plays made little gains on Tuesday.

"It's good to see green going into the next year but if you just take a step back and look at the broader picture you're seeing financial conditions change," said Joshua Chastant, senior investment analyst at GuideStone Capital Management.

"Our base case is that next year is going to have a lot of volatility around it, and it's definitely not going to be business as usual in the markets."

At 12:00 p.m. ET, the Dow Jones Industrial Average was up 461.08 points, or 1.32 percent, at 35,393.24, the S&P 500 was up 49.49 points, or 1.08 percent, at 4,617.51 and the Nasdaq Composite was up 187.12 points, or 1.25 percent, at 15,168.07.

Travel-related stocks, which fell in the previous session on the prospect of tighter curbs, rose on Tuesday. The S&P 1500 Airlines index jumped 5.8 percent and was set for its best day since early December.

General Mills Inc fell 4.2 percent after missing analysts' estimates for quarterly profit.

Advancing issues outnumbered decliners by a 4.46-to-1 ratio on the NYSE and by a 2.96-to-1 ratio on the Nasdaq.

The S&P index recorded nine new 52-week highs and no new low, while the Nasdaq recorded 20 new highs and 67 new lows. (Reporting by Shreyashi Sanyal and Bansari Mayur Kamdar in Bengaluru; Editing by Anil D'Silva, Uttaresh.V and Maju Samuel)

-reuters-

Ethereum breaks past $3,000 to quadruple in value in 2021

SINGAPORE - Cryptocurrency ether broke past $3,000 on Monday to set a new record high in a dazzling rally that has outshone the bigger bitcoin, as investors bet that ether will be of ever greater use in a decentralized future financial system.

Ether, the token transacted on the ethereum blockchain, rose 3% on the Bitstamp exchange to $3,051.99 by lunchtime in Asia. It is up more than 300% for the year so far, easily outpacing a 95% rise in the more popular bitcoin.

In part, the big rally is a catch-up to late 2020 gains in bitcoin, said James Quinn, managing director at Q9 Capital, a Hong Kong cryptocurrency private wealth manager.

It also reflects improvements to the ethereum blockchain, he said, and a growing shift towards "DeFi", or decentralized finance, which refers to transactions outside traditional banking for which the ethereum blockchain is a crucial platform.

"At first, the rally was really led by bitcoin because as a lot of the institutional investors came into the space, that would be their natural first port of call," Quinn said.

"But as the rally has matured over the last six months, you have DeFi and a lot of DeFi is built on ethereum."

The launch of ether exchange-traded funds in Canada and surging demand for ether wallets to transact non-fungible tokens such as digital art have also pushed up the price.

The ether/bitcoin cross rate has soared more than 100% this year and hit a 2.5-year high on Sunday, pointing to a degree of rotation into the second-biggest cryptocurrency as investors diversify their exposure.

"Surging DeFi volumes continue to push ethereum prices higher as investors gain confidence in crypto and see ethereum as a safe second-place asset," said Jehan Chu, managing partner at Hong Kong blockchain venture capital firm Kenetic Capital.

Illustrating the momentum for such new transactions, Bloomberg reported last week that the European Investment Bank plans on issuing a digital bond over the Ethereum blockchain, while JP Morgan plans a managed bitcoin fund.

Bitcoin, the world's biggest crypto asset with more than $1 trillion in market capitalization, regained the $50,000 mark last week and hovered around $58,000 on Monday, up about 3% but well below its record high at $64,895.22.

The US dollar was broadly steady.

-reuters-

Investors celebrate Biden winning US presidency

NEW YORK - Investors and financial executives took a big sigh of relief on Saturday after major networks declared Democrat Joe Biden winner of the US presidential election, offering some certainty after days of conflicting reports about who might run the White House next term.

Although current President Donald Trump said he would fight the results in court, Wall Streeters who offered comments felt there was little doubt Biden would ultimately succeed after election predictors including the Associated Press, NBC and Edison Research, upon which Reuters relies, called the presidency for Biden.

"Biden is good news for the markets," Christopher Stanton, chief investment officer at Sunrise Capital Partners, said on Saturday. "We're all so tired of the whipsaw that came with the Trump tweets."

Republicans have filed several lawsuits over ballot counting already and Trump said his campaign will file more. The Republican National Committee has been trying to raise at least $60 million to fund legal challenges brought by Trump, Reuters reported on Friday.

Apart from those battles, investors have been worried about the people Biden might appoint to his Cabinet, and whether the U.S. Senate would go to Republicans or Democrats.

A Republican Senate would offer a check on Biden's appointments, forcing him to opt for more moderate selections. Expected run-offs in two Senate races in Georgia could muddy that scenario.

For now, though, investors said they were happy with the election finally being called after what seemed like unending tension as ballots were counted following Election Day on Tuesday.

"Markets are going to like it because Biden is not going to go too far left," said Jim Awad, senior managing director of Clearstead Advisors. "It’s going to be a centrist government, not a government by tweet."

The financial industry was not reacting in a bubble: major cities from New York to San Francisco erupted in celebration on Saturday. Though Trump undoubtedly has significant support throughout the country, including on Wall Street, 2020 has been a difficult year for the United States.

The coronavirus pandemic has taken a huge toll on the country, killing some 236,250 people so far, while social unrest over the police killing of George Floyd, a Black man, has only hardened divisions that already existed.

Many voters were hoping for a decisive election that would offer some calm, whichever candidate they cast ballots for.

JPMorgan Chase & Co Chief Executive Jamie Dimon, who heads the largest U.S. bank and is a leading voice for the financial industry, called for unity and calm.

"Now is a time for unity," Dimon said in a statement. "We must respect the results of the U.S. presidential election and, as we have with every election, honor the decision of the voters and support a peaceful transition of power."

Robert Wolf, a major Democratic donor and former UBS Group AG executive who now runs 32 Advisors, was less demure: "I am ecstatic, relieved and deeply hopeful for the future of this country," he said in a text message.

During his campaign, Biden issued a series of left-of-center policy proposals that made Wall Street cringe regarding taxes and regulations. The proposals were seen as a carrot for progressive voters who preferred other candidates, but few now believe he will actually get them passed, since Republicans may win the Senate and Biden is not showing a landslide win.

As such, it is not clear whether Biden's Cabinet choices will be seen as market-friendly. The picks are important, because some of those officials will likely be involved in economic stimulus packages the White House will have to negotiate with Congress and will have extensive powers to craft Wall Street regulations.

Current US Federal Reserve governor and former McKinsey consultant Lael Brainard's name has been floated as a potential Treasury Secretary, while Biden has already tapped former derivatives market regulator and Goldman Sachs Group Inc banker Gary Gensler for advice on financial regulation.

Major US stock indexes registered their biggest weekly gains since April this week, as investors bet that Biden would win and Republicans would hold onto the Senate, a scenario that could prevent any major tax increases or regulatory tightening that pinches companies.

Nonetheless, investors have worried that the candidates could contest results for weeks or months. If Trump gains traction with his challenges, it could shake asset prices.

"Investors need to be prepared for some volatility," said Jason Ware, chief investment officer at Albion Financial Group. "There is certainly a risk to stock prices if we get bad tweets. The good news is that it would be short-lived and we are changing hands to someone who I believe is a lot more capable."

-reuters-

World shares mixed as investors eye virus counts, stimulus

Shares were mixed in Europe and Asia on Tuesday, after buying of technology stocks nudged the S&P 500 closer to the record high it set in February before the pandemic crunched the global economy.

Britain’s FTSE 100 slipped 0.1% to 6,122.05, while the DAX in Frankfurt lost 0.2% to 12,892.19. In Paris, the CAC 40 lost 0.3% to 4,957.26. The future for the S&P 500 edged 0.1% lower, to 3,376.30. The future for the Dow industrials lost 0.2% to 27,734.00.

Markets were buoyed by developments in Washington, after Speaker Nancy Pelosi called the House back into session, cutting short the lawmakers’ summer recess for a vote expected Saturday on legislation to prohibit changes in the U.S. Postal Service amid growing concerns that the Trump administration is trying to undermine the agency ahead of the November election.

The proposed package will also include $25 billion to shore up the Postal Service, which is suffering losses. But prospects for additional economic aid for American workers and businesses remain uncertain after talks on a fresh stimulus package stalled.

Investors say it’s crucial that the support comes, particularly after $600 in weekly unemployment benefits and other stimulus from the U.S. government expired.

Without more help for the U.S. economy, analysts say the recovery that investors have been assuming is on the way won’t materialize. And that assumption is a huge reason the stock market is as high as it is.

Still, on Monday the S&P 500 picked up 0.3% to 3,381.99. Earlier in the day, it briefly crossed above its record closing level of 3,386.15, which was set on Feb. 19 before the pandemic shut down businesses worldwide and created the worst recession in decades.

“The markets are in ‘show me the money’ mode, perhaps erring on the side of caution, not holding their breath for an imminent deal in Congress,” Stephen Innes of AxiCorp said in a commentary. “Sadly, this leaves the U.S. real economy waddling and many businesses and millions of consumers getting the short shrift.”

In Asia, South Korea’s Kospi led regional losses, slumping 2.5% to 2,348.24 amid worries over surging coronavirus cases.

South Korean health officials said Tuesday they had found 457 coronavirus cases linked to a huge northern Seoul church led by a bitter critic of the country’s president, driving an alarming rise in infections in the greater capital area.

During a virus briefing, Kwon Jun-wook, director of South Korea’s National Health Institute, said the outbreaks could create a situation comparable to the “miserable scenes of the United States or European countries.”

There’s concern that the virus’s spread could worsen after thousand of protesters, including members of the church and its ultra-right pastor, Jun Kwang-hun, marched in downtown Seoul Saturday despite official pleas to stay home.

Elsewhere, Hong Kong’s Hang Seng index lost 0.2% to 25,367.38. Japan’s Nikkei 225 slipped 0.2% to 23,051.08. Australia’s S&P/ASX 200 gained 0.8% to 6,123.40, while the Shanghai Composite index edged 0.4% higher, to 3,451.09.

Treasury yields moderated a bit, following a big rally for the 10-year yield last week. It dipped to 0.67% from 0.71% late Friday. It had zoomed upward from 0.56% through last week.

Higher yields suggest investors are upgrading their expectations for inflation and the economy. But they can also pull some buyers away from stocks into bonds, hurting stock prices.

Benchmark U.S. crude oil was flat at $42.89 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, picked up 6 cents to $45.43.

In currency dealings, the U.S. dollar weakened to 105.58 Japanese yen from 105.98 yen. The euro rose to $1.1890 from $1.1873.

Gold for delivery in December climbed $17.60 cents to $2,016.30 per ounce.

Associated Press

Asian markets look to follow Wall Street rally as oil surges

NEW YORK -- Asian markets on Friday looked to latch onto Wall Street's overnight gains after crude prices notched their biggest one-day surge on record, helping offset concerns about the depth of a global recession.

Despite the rally in stocks, investors still sought the safety of the US dollar and government bonds as an unprecedented number of Americans - 6.6 million - filed jobless claims due to coronavirus-induced lockdowns, as economic concerns stayed front and center.

US stocks rallied after US President Donald Trump said he expects Russia and Saudi Arabia to announce an oil production cut of up to 10 million to 15 million barrels as the two countries signaled willingness to make a deal.

Saudi Arabia said it would call an emergency meeting of the Organization of the Petroleum Exporting Countries, Saudi state media reported.

Nikkei futures edged slightly higher, above the index's cash close on Thursday, and Australia's benchmark was up 1.5 percent in early trade. Hong Kong futures were negative.

E-Mini futures for the S&P 500 fell 0.04 percent. A gauge of stocks across the globe advanced 1.24 percent overnight, adding to modest gains earlier in Europe.

On Wall Street, the Dow Jones Industrial Average rose 2.2 percent, the S&P 500 gained 2.3 percent and the Nasdaq Composite added 1.7 percent.

Projections released by the US Congressional Budget Office showed US gross domestic product will decline by more than 7 percent in the second quarter as the coronavirus crisis takes hold.

Interest rates on 10-year Treasuries will likely be below 1 percent during the quarter as well, the CBO said.

Investors sought the perceived safety of government bonds. Benchmark US 10-year notes fell in price to last yield 0.6111 percent.

Global coronavirus cases surpassed 1 million on Thursday with more than 52,000 deaths as the pandemic further exploded in the United States and the death toll climbed in Spain and Italy, according to a Reuters tally.

The dollar gained for a second straight day against a basket of currencies as investors continued to take shelter in the US currency.

The dollar index rose 0.672 percent, while the Japanese yen weakened 0.21 percent versus the greenback at 108.15 per dollar.

Gold prices jumped as record high US jobless claims intensified fears of the coming economic slowdown and drove investors toward the safe-haven metal.

US gold futures settled 2.9 percent higher at $1,637.70 an ounce.

Highly rated US corporate bond issuers raised a record $110.502 billion this week, according to Refinitiv IFR data, as firms borrowed cash in fear the coronavirus crisis may soon limit their access to capital markets.

Brent futures rose $5.20, or 21.0 percent, to settle at $29.94 a barrel, while US West Texas Intermediate (WTI) crude rose $5.01, or 24.7 percent, to settle at $25.32.

Despite the record surge on Thursday, oil prices have still lost more than half their value this year.

-Reuters-

Buy, sell or hold? How to navigate the coronavirus-infected stock market

MANILA -- Wild swings in stock prices here and abroad due to the coronavirus pandemic show the nature of the equities market: it's volatile, an analyst said Thursday.

How investors should respond will depend on their tolerance for risk, the size of their emergency fund, even their age, said Marvin Fausto, president and CIO of COL Investment Management.

Fausto gave some tips on how to manage stock portfolios during the COVID-19 crisis, which formed many countries, including the Philippines, to lock down millions.

BUY STOCKS IF...

"Wealth accumulators" in their 30s and 40s have many years left in terms of investing and can take advantage of low prices, provided they have emergency funds, Fausto said.

"If you have a long way to go, it may good for them to buy because they can accommodate that kind of volatility," he said.

SELL STOCKS IF...

Retired persons who rely on fixed income can reduce their exposure to risky assets such as stocks, Fausto said.

These types of investors can "sell and be comfortable with what you have," he said.

OR, JUST HOLD

The equities market is inherently volatile and at the mercy of global events such as COVID-19. As with most cycles, financial markets recover, Fausto said.

"Don't look with too much concern with how the market moves. That's how it moves, it goes up and down," he said.

source: news.abs-cbn.com

Stock markets and COVID-19: 5 questions every investor should ask

Simon Powell watches fever hotspots in America. Stephen Innes pores over real-time measurements of vehicle traffic -- or the lack of it-- in cities around the globe. And, Mark Galasiewski studies stock performance charts from the time of Sars and the 1968 flu pandemic.

The three financial analysts are tapping diverse and sometimes quite esoteric data to try to predict how the spreading coronavirus pandemic will affect the price of assets -- everything from stocks on Hong Kong's Hang Seng Index to gold and orange juice futures.

Even obesity rates in the US may be worth pondering because they might explain why young people seem to account for a higher portion of infections in America than in China. That, in turn, has implications not only for short-term stock prices but also for the future of the US workforce.

And those orange juice futures? They spiked, signaling a surge in demand for Vitamin C just when supplies were getting harder to transport.

"Economics in the time of Covid-19 is a different beast, with the best data being real time that provides insight into the extent of the slowdown," said Thailand-based Innes, chief global asset strategist at AxiCorp, who finds himself up before dawn to check data from other parts of the world.

"I'm using more real-time data now than I ever have before. I would never ever care about initial (US unemployment) claims, but it is huge now. ... I would never wake up at 2 a.m. (to check it) on such a regular basis," he said.

"One of the more interesting ones is traffic data from TomTom. It shows the speed with which Houston went into a virtual shutdown, which both illustrates the ghost town outlook due to the collapse of the shale industry and mobility restrictions," he explained.

Coronavirus turns stock markets into the wildest ride on the planet " and that's not likely to change soon

Even from a strictly financial perspective, this moment is like being trapped in the early chapters of a Stephen King horror novel, he says. And the saga of this pandemic is unfolding in terrifying twists and turns that are buffeting the portfolios handled by professionals and family investors alike.

Here are five questions investors should be asking.

1. When will markets hit bottom?

Volatility is generally expected to continue in Hong Kong and elsewhere for at least the next few weeks.

Powell, the global head of thematic research at Jefferies, thinks global markets have further to fall.

"What the market is trying to figure out is, 'Are we in for a global recession? Could it actually be a thing that starts with a 'D' -- a depression? And how much stimulus might be needed to dampen the impact on people's lives?

"If the economy grinds to a halt globally, then maybe there could be another leg down in markets ... This shock could be bigger than anything we've seen since WWII in terms of shock to global trade and global demand," Powell said.

Some analysts believe a bottom is likely already behind us " at least in Hong Kong and China, and possibly in the US.

"From now on, the (Hong Kong) market will stabilize a bit, because the wave of panic selling and liquidation is over," said Alex Wong, director of asset management at Ample Capital.

Twice in recent weeks -- on March 19 and March 23 -- the Hang Seng Index closed below 22,000. It won't go lower, Wong predicts, saying it will now trade between 22,000 and 26,000, as traders finish shifting to more promising sectors and gain confidence in making larger bets.

2. Is anywhere a fairly safe place to invest?

Predictably, analysts point in different directions.

In Hong Kong, avoid retail, local property, as well as airlines, restaurants, casinos and anything else connected with tourism, argues Wong of Ample Capital.

Last week saw investors shifting out of those sectors and into social media giant Tencent and other new-economy stocks likely to thrive on lockdowns and work-from-home directives.

Could coronavirus lockdown have big upside for China's new economy stocks as users and smartphones become BFFs?

Yet casino operator Galaxy Entertainment is one of the pummeled stocks liked by Morningstar's Lorraine Tan. She also points to Anta Sports, which like Galaxy is listed in Hong Kong, and US-listed Ctrip.com, a Chinese online travel agency.

"It has been difficult to keep on top of the rapidly shifting environment, but collectively we find more opportunities to buy than sell shares at the current level," said Tan, Morningstar's director of equity research, Asia.

"We think there are a number of names with strong competitive advantage that investors should consider adding to their portfolios as well as heavily sold-down stocks that could see a good post-virus bounce," she added.

China's health care, infrastructure stocks lure global bargain hunters even as coronavirus pandemic roiled equity markets in March

In the US, Wong likes e-commerce giant Amazon, Microsoft, and Netflix.

Internet-based companies are seeing a surge in traffic, Goldman Sachs analysts note.

Those include Tencent Holdings, China Literature, office software maker Kingsoft, all listed in Hong Kong, and Chinese game-streaming platform Huya, and Baozun, which helps foreign brands sell to online Chinese customers, both of which are listed in the US.

3. Is a virus-triggered downturn different from an ordinary financial crisis?

In many ways, yes.

US Federal Reserve chairman Jerome Powell stressed that the US economy, the world's largest, was fundamentally strong before the pandemic and predicted that it will rebound quickly once the virus's spread is controlled. That makes today's situation different from, say, the 2008-2009 global financial crisis, which was caused by underlying financial problems.

But the modern world has never been assaulted by a pandemic of this scale, and its threat to global GDP is undeniably real, as is the danger -- pointed out by US infectious disease expert Anthony Fauci -- that this coronavirus come back until there is a vaccine.

"We're dealing with a pandemic economic crisis that, at this stage, is medically unstoppable, which is flat-out scary, which we only thought existed in Stephen King's horror stories," AxiCorp's Innes said.

"We tend to overlook that during the (2008) Lehman(Brothers' bankruptcy) crash, outside the financial sector, life went on. In essence, restaurants took bookings; taxis took rides; shops were still bustling. This time around, the entire world is on the precipice of shutting down. Unemployment will soar," Innes said.

Indeed, US unemployment already has, skyrocketing to an unprecedented 3.3 million claims last week alone -- up from about 200,000 just 3 weeks ago.

Yet Galasiewski, chief equity analyst for Asia and emerging markets at Elliott Wave International, is positively bullish. His study of infectious diseases has lead him to see them as long-term buy signals in the local markets. Sars in 2002, for example, led to a tremendous bull run in Hong Kong. He is now especially bullish on stocks listed in China, where the coronavirus outbreak began.

"A big advance has begun in the main Asia and emerging market indexes. This is not just a rebound. It's the early stages of a secular bull market," he said, referring to a long period of rising stock prices due to policy supports.

4. What data might offer clues for smart asset management?

Analysts are closely watching Italy's new infection totals to see whether its containment efforts are beginning to work. The numbers coming out of Italy will help analysts project the length and depth of the crisis in the world's largest economy, where the pandemic is much newer.

The US Federal Reserve and government have thrown in the "kitchen sink" to try to keep businesses and workers afloat. So analysts are looking for economic indicators that show that the US effort is having the desired effects of increased lending and stable stock markets, for example.

And, of course, analysts are watching for news of promising therapies and a vaccine, generally not expected until next year.

Unusual windows into the virus include TomTom.com, which shows real time traffic around the globe, Kinsa's tracking of fevers in America through smart thermometers (healthweatherus.com), and the Centre for Disease Control and Prevention's website, which is tracking infections and deaths, as well as outbreaks of influenza-like illnesses on its FLUVIEW chart.

"I never thought I would be looking at the collective body temperature of people in the US," said Jefferies analyst Powell.

5. What are the 'what ifs' ahead?

What if the pandemic dies away but comes back with equal fury?

What if people who recover remain infectious?

What if the disease causes permanent lung damage to young people? "Could we end up with a generation of people who are disabled and sick as a result of what this virus does?" Jefferies' Powell asks.

What if the pandemic explodes in India, a country with 1.3 billion people, an inadequate health care system and little sanitation for many countless slum dwellers?

India, now under a nationwide lockdown for 21 days, is the world's largest supplier of generic drugs. It has already halted the export of ventilators and an antimalarial drug used with some success against the new coronavirus.

What if a vaccine simply can't be found?

Despite everyone's endless "what ifs" about the future health of the world's people and finances, Powell, an experience yachtsman's who has weathered frightening tempests before remains hopeful.

"I am hugely optimistic that humankind can turn a veritable firehose of intellectual property and money and research and development at this virus to understand it and find a therapy and find a vaccine and get it out. Humankind has defeated many pandemic viruses ...

"But investors do need to be cautious."


Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.

World stock rebound stalls as doubts about US coronavirus response grow

TOKYO -- Asian shares and Wall Street futures fell on Wednesday as growing skepticism about Washington's stimulus package to fight the coronavirus outbreak knocked the steam out of an earlier rally.

Markets had been recovering from a brutal global selloff on Monday that was triggered by the double shock of an oil price crash and the worsening outbreak.

Those gains looked short-lived in early Asian trade, with U.S. stock futures falling 1.54 percent and MSCI's broadest index of Asia-Pacific shares outside Japan down 0.04 percent. Australian shares were down 1.31 percent. Japan's Nikkei index erased early losses to rise 0.24 percent.

Earlier this week, US President Donald Trump said he would take "major steps" to ease economic strains caused by the spread of the flu-like virus. Headlines focused on discussions of payroll tax cut, which helped lift market sentiment.

However, the lack of major announcements since then has left some investors unimpressed.

"We were promised something substantive from the Trump administration, and if it hasn't come yet at this hour, then it looks like it is being delayed," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

"That's why markets have a negative tone. From a global investor's perspective, there are still a lot of downside risks."

On Wall Street all three major indexes jumped nearly 5 percent on Tuesday, one day after US equities markets suffered their biggest one-day losses since the 2008 financial crisis.

The dollar gave up gains and fell against the yen, the Swiss franc and the euro as uncertainty set in.

Benchmark US 10-year Treasury yields were last at 0.7603 percent, more than double Monday's record low yield of 0.3180 percent.

Further gains in yields could be limited because there are still strong expectations that the US Federal Reserve and other central banks will support fiscal stimulus with monetary easing.

Market participants largely expect the Fed to cut interest rates for the second time this month at the conclusion of next week's regularly scheduled policy meeting after surprising investors last week with 50 basis point rate cut.

The euro is also in focus before a European Central Bank meeting on Thursday, where policymakers will face pressure to ease policy after Italy put its entire country on lockdown in an attempt to slow new coronavirus infections.

US crude fell 0.52 percent to $34.18 a barrel, dashing hopes that the market could stabilize.

On Monday the oil market collapsed and futures saw their largest percentage drop since 1991 Gulf War as a price war between Saudi Arabia and Russia broke out.

Many analysts say investors need to remain on guard for further market volatility, because the coronavirus still poses a risk to public health in many countries, which could place additional strain on the global economy.

The virus emerged late last year in the central Chinese province of Hubei but has since spread rapidly outside of China, leading to more than 4,000 deaths.

Restrictions on movement and factory closures aimed at stopping the epidemic are putting the brakes on global economic activity.

source: news.abs-cbn.com

Markets mostly rise after emergency Fed cut sinks Wall St

LONDON - Asian and European stocks mostly rose Wednesday after the Federal Reserve sprang its first emergency rate cut since the global financial crisis to counter economic fallout from coronavirus.

In the first unscheduled rate reduction since 2008, the Fed axed its key interest rate by a half-point to a range of 1.0-1.25, arguing it was needed because "coronavirus poses evolving risks to economic activity".

Wall Street then tanked on fears the central bank was in panic mode over the spreading COVID-19 disease, which has so far killed 3,200 people worldwide and infected more than 90,000.

However, equities in Europe and Asia mostly advanced on Wednesday as investor nerves subsided, dealers said.

In commodities, oil rallied on indications that the OPEC crude producing cartel could slash output this week in order to prop up prices.

"Market sentiment certainly seems to have stabilized after a historic US session which saw the role of monetary policy undermined as traders sold into an extraordinary bout of easing from the Fed," said IG analyst Joshua Mahony.

"The US economy is actually yet to feel a significant economic impact from this virus, and thus the decision to take such drastic action provided markets with a warning of exactly how big this threat is," added Mahony, noting the Fed still has a scheduled rate call in two weeks.

In late morning deals, London stocks jumped 1.3 percent, while there were 1.0-percent gains in Frankfurt, Paris and Milan.

The deep cut in US rates on Tuesday followed a statement from G7 finance ministers that they stood ready to take "appropriate actions... including fiscal measures" in response to the virus.

Lower interest rates traditionally boost the global economy because they curb loan repayments for businesses and individuals, and also increase the level of consumers' disposable income.

Yet many analysts predict the US rate cut will not be enough to offset virus-fuelled economic turmoil.

- 'Fairly ineffectual' rate cut? -

"It is the first emergency cut since the financial crisis -- and the rate cut will be fairly ineffectual in offsetting the coming hit to the economy from the coronavirus," said Kingswood chief investment officer Rupert Thompson, predicting that the Bank of England could follow the same path.

"While these moves may help support equities short term, they do little to reduce the enormous uncertainty over the extent of the eventual spread of the coronavirus and the damage it could have on global growth."

In announcing the reduction, the US Federal Open Market Committee said US fundamentals "remain strong" but warned that "coronavirus poses evolving risks to economic activity". 

The move initially sent Wall Street rallying, but traders soon reversed course as they grew increasingly nervous about the economic outlook. 

All three main US equity indices finished almost three percent down.

However, Asian investors battled to build on the previous day's gains and Tokyo ended up 0.1 percent, while Shanghai added 0.6 percent.

Seoul surged more than two percent as South Korea -- which is the worst virus-hit country outside China -- reported a sharp drop in new cases, while the government is planning a $10-billion stimulus budget.

Hong Kong fell 0.2 percent after weak gauge of manufacturing, construction, wholesale, retail and services in the city fell to its lowest level in February since it started being recorded in mid-1998. 

- Oil output cut hope -

The rate cut sent yields on safe-haven 10-year US Treasuries, a go-to asset in times of turmoil, below one percent for the first time on record. Gold, another fallback for worried investors, jumped more than two percent to $1,634.

Oil prices added more than one percent after OPEC advisers suggested the group, along with other producers including Russia, slash output by up to a million barrels a day.

The recommendation comes as the oil big-hitters prepare to meet this week to discuss the crisis, which has hammered global demand for the commodity.

source: news.abs-cbn.com

Global stocks tumble as gold soars on virus pandemic fears

NEW YORK -- Global stocks were hammered Monday and gold prices soared on safe-haven buying as fears mounted that the new coronavirus would derail economic growth.

Equity bourses were a sea of red, including in Italy and South Korea -- two countries outside of China that have suffered outbreaks of the virus in recent days. In the US, the Dow plunged more than 1,000 points in its worst session in more than 2 years.

"The market reaction is a classic 'sell now and ask questions later,'" said Quincy Krosby, chief market strategist for Prudential Financial, who said the selloff reflects fears the virus will dent earnings growth.

Oil prices tumbled on worries about demand, while gold prices on the London Bullion Market spiked to $1,689.31 per-ounce, a level last seen in January 2013, before easing back somewhat as investors sought the precious metal as a safety measure amid the market turbulence.

Investors have been unsettled by the spread of the disease, analysts said.

Italy reported its seventh death from the coronavirus, but officials called for calm and reported the number of infections slowing after a spike over the weekend.

South Korea's K-league postponed the start of the new football season as a leap in cases wrought havoc across its sporting calendar.

Meanwhile, the World Health Organization said the new coronavirus epidemic had "peaked" in China but warned that a surge in cases elsewhere was "deeply concerning" and all countries should prepare for a "potential pandemic."

US President Donald Trump on Twitter said the virus "is very much under control in the USA," adding that "stock markets are starting to look very good to me!"

Trump's comments aimed to encourage bargain-hunting after major US indices ended down more than three percent, with all 11 industrial sectors tumbling.

Earlier, European stock markets were a sea of red, with Frankfurt and Madrid falling by 4 percent, Paris shedding 3.9 percent and London losing 3.3 percent.

"The root of the problem is this: there is burgeoning fear that the shutdown effect that has hit China's economy is going to take over elsewhere, dealing another blow to global growth, and earnings growth prospects," commented Patrick O'Hare at Briefing.com.

Travel and tourism linked firms were particularly vulnerable, with Sydney-listed airline Qantas plunging more than seven percent, and Air China off by nearly six percent in Hong Kong.

An exception was Gilead Sciences, which surged 4.6 percent following upbeat comments from a World Health Organization official about the company's remdesivir, an experimental drug to treat the virus.

KEY FIGURES AROUND 2200 GMT (6 a.m. Tuesday in Manila)

New York - Dow: DOWN 3.6 percent at 27,960.80 (close)

New York - S&P 500: DOWN 3.4 percent at 3,225.89 (close)

New York - Nasdaq: DOWN 3.7 percent at 9,221.28 (close)

Milan - FTSE Mib: DOWN 5.4 percent at 23,427.19 (close)

Madrid - IBEX 35: DOWN 4.1 percent at 9,483.50 (close)

London - FTSE 100: DOWN 3.3 percent at 7,156.83 (close)

Frankfurt - DAX 30: DOWN 4.0 percent at 13,035.24 (close)

Paris - CAC 40: DOWN 3.9 percent at 5,791.87 (close)

EURO STOXX 50: DOWN 4.0 percent at 3,647.98 (close)

Seoul - KOSPI: DOWN 3.9 percent at 2,079.04 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,031.23 (close)

Hong Kong - Hang Seng: DOWN 1.8 percent at 26,820.88 (close)

Tokyo - Nikkei 225: Closed for a public holiday

Brent Crude: DOWN 3.8 percent at $56.30 per barrel

West Texas Intermediate: DOWN 3.7 percent at $51.42 per barrel

Gold: UP at $1,676.50 per ounce from $1,643.41 late on Friday

Euro/dollar: UP at $1.0852 from $1.0847

Pound/dollar: DOWN at $1.2924 from $1.2964

Euro/pound: UP at 83.95 pence from 83.67 pence

Dollar/yen: DOWN at 110.71 from 111.61

Agence France-Presse

World stocks drop, gold surges as coronavirus fears trigger flight for safety

SYDNEY -- Global shares and oil extended losses on Monday while safe-haven gold soared as the spread of the coronavirus outside China accelerated with infections jumping in South Korea, Italy and the Middle East, in a worrying new development in the outbreak.

South Korea put the country on high alert after the number of infections surged to over 600 with six deaths. In Italy, officials said a third person infected with the flu-like virus had died, while the number of cases jumped to above 150 from just three before Friday.

Iran, which announced its first 2 cases on Wednesday, said it had confirmed 43 cases and eight deaths, with most of the infections in the Shi'ite Muslim holy city of Qom. Saudi Arabia, Kuwait, Iraq, Turkey and Afghanistan imposed travel and immigration restrictions on the Islamic Republic.

In a sign of panic, E-minis for the S&P 500 dropped 1 percent in early Asian trades while Nikkei futures slipped more than 1 percent too.

Australia's benchmark index slid 1.6 percent while New Zealand was down about 1 percent. South Korea's KOSPI index fell 2.2 percent.

That left MSCI's broadest index of Asia-Pacific shares outside Japan off 0.7 percent to 541.48, the lowest since Feb. 5. Japanese markets were closed for a public holiday.

"It promises to be an interesting session here in Asia, with the bears back wrestling a bit more of a say here, and gold and bond bulls feeling pretty good about their exposures," said Chris Weston, head of research at broker Pepperstone.

"The news flow from the weekend has changed the game somewhat, where the focus is much more on the threat of an outbreak outside of China."

The virus has killed 2,442 people in China, which has reported 76,936 cases, and slammed the brakes on the world's second largest economy.

It has spread to some 28 other countries and territories, with a death toll of around two dozen, according to a Reuters tally.

Investors fretted over the mounting economic toll from the virus, betting on more monetary policy action from central banks. In response, US Fed fund futures surged signalling more rate cuts later this year.

While markets had largely brushed aside fears of long-term economic damage from the virus, a steady drip of new cases in countries beyond China has kept concerns alive.

On Friday, US stocks were beaten down by concerns about the virus and after data showed American business activity stalled in February, signaling a contraction for the first time since 2016.

US chipmakers fell sharply last week as a flash reading of the IHS Markit services sector Purchasing Managers' Index dropped to its lowest level since October 2013. The manufacturing sector also clocked its lowest reading since August.

The dollar fell for a second straight session on Monday against the yen to be last at 111.48.

The Australian dollar, considered a liquid proxy for China plays, was down 0.4 percent as it languished near an 11-year low.

The euro eased a tad to $1.0836.

That left the dollar index slightly higher at 99.430.

Analysts expect the Korean won to slump against the dollar as one of the favorite risk proxies for investors.

The won has fallen more than 4.5 percent on the dollar so far this year. It was last unchanged at 1,206.87

"Whether this proves to be a driver of more mainstream FX pairs, such as AUDJPY and AUDUSD is yet to be seen, although AUDUSD looks the better short on the weekly chart," Pepperstone's Weston said.

Oil prices slid as investors fretted about crude demand being pinched by the impact of the coronavirus outbreak, while leading producers appeared to be in no rush to curb output.

Brent crude slumped 2.8 percent, or $1.63, to $56.87 a barrel while US crude dropped 2.6 percent, or $1.4, to $51.97 a barrel.

US gold futures climbed 1.2 percent at $1,668.6 an ounce. Spot gold jumped to a seven-year high of 1,678.58 after marking its biggest weekly gain last week since early August.

source: news.abs-cbn.com

Chinese support measures buoy world stocks

LONDON -- Global shares were buoyant on Monday as the promise of further policy stimulus from China to counteract the economic hit from a coronavirus outbreak calmed nervous investors.

Trading was light, with US stocks and bond markets shut for a public holiday.

Both the pan-European STOXX 600 index and Germany's DAX reached record highs before paring some gains. The MSCI All-Country World Index, which tracks shares across 47 countries, was flat on the day.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.14 percent to near last week's peak of 558.30, its highest since late January.

The gains were led by China, whose blue-chip index climbed 2.25 percent after the country's central bank lowered a key interest rate and injected more liquidity into the system.

Also whetting risk appetite was an announcement by China's finance minister on Sunday that Beijing would roll out tax and fee cuts.

"Traders are mindful of the fact the Chinese authorities intervened in the financial markets at the beginning of the month, when the domestic stock markets reopened after the Lunar New Year celebrations," said David Madden, market analyst at CMC Markets in London.

"Some dealers hold the view that Beijing will intervene in the markets again should the situation get much worse, which could explain the resilience of equity markets."

Fears about the jolt to the world economy from the coronavirus lingered, though, as the number of reported new cases in China rose to 2,048 as on Sunday from 2,009 the previous day.

"The latest numbers from the Hubei province still suggest that the infection pace is slowing after the sudden jump following the methodology changes last week," Danske Bank said in a research note, highlighting that the number of new cases within China is the lowest since Jan. 23.

Restrictions were tightened further in Hubei over the weekend. Most vehicles were banned from the roads and companies told to stay shut until further notice.

Japan's Nikkei fell 0.7 percent after its economy shrank at the fastest pace in almost 6 years in the December quarter. The slowdown in the world's third-largest economy came amid concern the coronavirus effects will hurt output and tourism, stoking fears Japan may slump into recession.

The coronavirus also led trade-dependent Singapore to downgrade its 2020 economic growth forecast. China's economy is widely expected to slow sharply as well.

BULL RUN

South Korea's KOSPI index ended mostly flat. Australian, Singapore and Malaysian share indexes weakened.

Asia's woes have yet to spread to the United States, though. Wall Street indexes scaled record highs on Friday.

Talk of a middle class tax cut and a proposal to encourage Americans to invest in stocks boosted equity markets late last week, Betashares chief economist David Bassanese said.

Bassanese had misgivings about the plan, saying it reminded him of former US President George Bush encouraging Americans to buy a home during a housing boom.

"It adds to my suspicion that this decade-long bull market could eventually end via a blow-off bubble, driven by central bank persistent low interest rate policy," he said in a note.

Later in the week, flash manufacturing activity data for February are due for the euro zone, the United Kingdom and the United States. They are likely to capture some of the early impact of the viral epidemic.

Action was relatively muted in currency markets, with the dollar up against the yen at 109.90 and the pound at $1.3015. It gained against the euro to $1.0840.

The risk-sensitive Aussie, which is also played as a liquid proxy for Chinese assets, ticked up 0.1 percent to $0.6721.

That left the dollar index flat at 99.135.

In commodities, gold fell 0.22 percent to $1,581.25 an ounce. Brent crude was flat at $57.31 a barrel and US crude added 0.1 percent to $52.09.

source: news.abs-cbn.com

Asian shares ease off 3-week highs as virus fears return

SYDNEY -- Asian shares stepped back from three-week highs on Monday as investors weighed the near-term hit on global growth from a fast-spreading coronavirus outbreak in China, although expectations of further policy stimulus helped stem losses.

Trading is expected to be light as US stocks and bond markets will be shut on Monday for a public holiday.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1 percent to 555.50, easing further from last week's top of 558.30, which was the highest since late January.

Australian shares and South Korea's KOSPI index were each down 0.3 percent.

Japan's Nikkei fell more than 1 percent after data showed the country's economy contracted at an annualized pace of 6.3 percent in October-December, shrinking at the fastest pace since the second quarter of 2014.

The hit to the world's third-largest economy comes amid fresh concerns about weakness in the current quarter, as the coronavirus damages output and tourism, stoking fears Japan may be on the cusp of a recession.

Worryingly, Singapore downgraded its 2020 economic growth forecast due to the coronavirus outbreak, while China's economy is also widely expected to take a sharp hit.

Within China's Hubei province - the epicentre of the coronavirus epidemic, authorities reported 1,933 new cases on Monday, about 5 percent higher than the previous day.

Nationwide figures, due later in the day, are also expected to show an increase from the 2,009 cases last reported.

In a bid to help cushion the jolt from the epidemic, China's Finance Minister announced plans on Sunday to roll out targeted and phased tax and fee cuts to help relieve difficulties for businesses.

"There is also an expectation of fresh monetary policy support this week (from China) with a possible reduction of 5 basis points when the monthly prime loan rate is set," said Ray Attrill, head of forex strategy at National Australia Bank.

BULL RUN

Asia's woes have yet to spread elsewhere, with Wall Street indexes scaling record highs.

E-Mini futures for the S&P500 were up 0.1 percent in early Asian trading on Monday.

Talk of a US middle class tax cut and a proposal to encourage everyday Americans to invest in the equities market boosted share market sentiment late last week, Betashares chief economist David Bassanese said.

Bassanese had misgivings about the plan, saying it reminded him of former US President George Bush encouraging Americans to buy a home during a housing boom.

"It adds to my suspicion that this decade-long bull market could eventually end via a blow-off bubble, driven by central bank persistent low interest rate policy," he said in a note.

Later in the week, flash manufacturing activity data for February are due for the Eurozone, the United Kingdom and the United States which is likely to capture at least some of the early impacts of the viral epidemic.

Action was relatively muted in the currency markets, with the dollar flat against the yen at 109.74. It was unchanged on the pound at $1.3049 and a tad weaker on the euro at $1.0837.

The risk-sensitive Aussie, which is also played as a liquid proxy for the Chinese yuan, was also barely moved at $0.6716.

That left the dollar index at 99.093.

In commodities, gold inched slightly lower to $1,583.15 an ounce.

Oil futures were mixed with Brent crude down 8 cents at $57.24 and US crude up 4 cents at $52.09.

source: news.abs-cbn.com

Jump in coronavirus cases halts stock rally; dollar gains

NEW YORK/LONDON -- The dollar rose and global equity markets slumped on Thursday after a new methodology that boosted the coronavirus death toll in China unnerved investors, curbing a rally that had lifted US and European stocks to a series of record peaks.

Chinese officials said 242 people died in Hubei province on Wednesday, the biggest daily rise since the virus emerged in the provincial capital of Wuhan in December.

More than 14,000 new cases were reported in the province on Thursday, up from 2,015 new cases nationwide a day earlier, due to a change to include results from quicker computerized tomography (CT) scans that reveal lung infections, rather than relying just on laboratory tests to confirm cases.

The jump in reported cases halted a rally that lifted Wall Street's 3 main gauges, indexes for pan-regional European shares, Germany's DAX and Canada's S&P/TSX index.

Investors sought safety in US assets, pushing the yield on the 10-year US Treasury note lower as the euro plunged to a more than two-year low against the dollar. The euro fell to a four-and-a-half-year low against the Swiss franc.

The United States is expected to weather the economic impact of the virus better than the euro zone.

The chief economist of AXA Investment Managers, Gilles Moec, said the impact of the virus could be part of a "perfect storm" for Europe that hurts the economy for months before being compounded by a heated trade battle with the United States.

"We started with the premise that this virus would be worse than SARS and that has now become consensus," Moec said. "So attention turns to who is hit the hardest, and Europe is among the usual suspects and Germany in particular, given China is its biggest export market. So the reaction of the exchange rate is probably rational."

The dollar index rose 0.05 percent, with the euro down 0.3 percent at $1.0838.

Europe's main markets followed Asia into red, while stocks on Wall Street traded slightly lower to little changed.

MSCI's gauge of stocks across the globe shed 0.25 percent and its emerging markets index lost 0.42 percent.

The pan-European STOXX 600 index lost 0.02 percent.

The FTSE 100 in London slid 1.1 percent, derailed by steep falls in heavyweights Barclays and utility Centrica , along with the jolt to risk sentiment from the rise in coronavirus cases in China.

On Wall Street, the Dow Jones Industrial Average fell 128.11 points, or 0.43 percent, to 29,423.31. The S&P 500 lost 5.51 points, or 0.16 percent, to 3,373.94 and the Nasdaq Composite dropped 13.99 points, or 0.14 percent, to 9,711.97.

While the jump in reported coronavirus cases was unsettling, markets in Asia took the news in stride.

MSCI's broadest index of Asia-Pacific shares outside Japan snapped 2 days of 1 percent gains to close 0.1 percent lower as most markets across the region posted modest declines.

Oil prices rose, shrugging off bearish reports that cut demand forecasts for this year on the back of the coronavirus outbreak. China is the world's biggest oil importer.

Paring losses from earlier in the session, Brent crude rose 55 cents to settle at $56.34 a barrel, while U.S. West Texas Intermediate added 25 cents to settle at $51.42 a barrel.

Benchmark 10-year notes last rose 4/32 in price to push its yield down to 1.6139 percent. The yield earlier touched 1.568 percent.

US gold futures settled up 0.5 percent at $1,578.80 an ounce.

There was drama for Brexit-bound British markets.

The sudden resignation of the British finance minister Sajid Javid caused a jump in both sterling and British government bond yields amid bets that his replacement, the 39-year-old Rishi Sunak, will beef up spending.

Javid's departure, coming less than a month before he was due to deliver his first budget and after just 204 days on the job, made him the shortest-serving chancellor of the exchequer since 1970.

"I suspect he (Sunak) is likely to do whatever Boris Johnson tells him to do," said Nomura economist George Buckley. "I don't know what that means for the public finances and fiscal policy, but I doubt it will mean tighter fiscal policy."

source: news.abs-cbn.com