NEW YORK, June 25 ― Rising concerns about a surge in coronavirus infections sent global equities and oil prices lower yesterday and pushed investors into perceived safe havens such US Treasuries and gold, which hovered near its highest level in eight years.
Several US states are posting record infections and the death toll in Latin America exceeded 100,000, according to a Reuters tally.
The New York Times reported the European Union was prepared to bar US travellers, putting it in the same category as Brazil and Russia.
Adding to the gloom, European Central Bank chief economist Philip Lane warned the euro zone economy would need a long time to recover despite a string of solid data in recent days.
The United States is considering tariffs on US$3.1 billion (RM13.3 billion) of exports from Britain, France, Spain and Germany, Bloomberg news reported, citing a notice published by the office of the US Trade Representative.
“With rising daily Covid-19 cases in the US remaining front page news, the headlines are proving to be a weighty burden to bear this morning,” Stephen Innes, chief global market strategist at AxiCorp, said.
MSCI's gauge of stocks across the globe shed 2.33 per cent following broad declines in Europe and Asia. The MSCI index has treaded water in recent weeks after jumping more than 40 per cent from March lows on hopes the worst of the pandemic was over.
On Wall Street, the Dow Jones Industrial Average fell 708.72 points, or 2.71 per cent, to 25,447.38, the S&P 500 lost 80.82 points, or 2.58 per cent, to 3,050.47 and the Nasdaq Composite dropped 222.20 points, or 2.19 per cent, to 9,909.17.
The International Monetary Fund said it now expects global output to shrink 4.9 per cent this year, much sharper than the 3.0 per cent contraction predicted in April. It also reined in its forecast for a 2021 recovery, calling for global growth at 5.4 per cent compared to 5.8 per cent in the April forecast.
The dollar index rose 0.52 per cent, with the euro down 0.34 per cent to US$1.1268. The dollar is approximately 5 per cent below three-year highs touched in March.
“The dollar and risk sentiment are likely to remain broadly negatively correlated, barring the US displaying clear and enduring leadership in the global economic recovery, something hard to square with the grim US news on Covid,” said Ray Attrill, head of FX strategy at NAB.
Spot gold dropped 0.2 per cent to US$1,762.81 after touching US$1,773, its highest since October 2012, in Asian trading. US gold futures gained 0.23 per cent to US$1,776.10 an ounce.
Prices of benchmark 10-year US Treasury notes edged higher, dropping their yields to 0.6839 per cent from 0.709 per cent late on Tuesday.
Concerns about high inventories pushed oil prices broadly lower.
US crude fell 5.85 per cent to US$38.01 per barrel and Brent was at US$40.11, down 5.91 per cent on the day. ― Reuters
