LONDON, Oct 13 —European shares fell today as worries over the coronavirus pandemic overshadowed Chinese trade data that pointed to a buoyant recovery, while the US dollar edged away from a three-week low.
The broader Euro STOXX 600 fell 0.4 per cent in early trading, with bourses in Frankfurt, London and Paris all down by a similar margin.
Keeping markets on edge, traders said, was news that Johnson & Johnson 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 coronavirus vaccine as key to helping economies bounce back. J&J’s move comes after AstraZeneca paused late-stage trials of its experimental vaccine in September, also due to a participant’s unexplained illness.
The travel and leisure and autos sectors suffered, losing 1.7 per cent and 0.6 per cent respectively.
Wall Street was also set to lose ground, with S&P 500 futures last down 0.5 per cent.
The pessimistic mood jarred with earlier resilience on Asian markets, which recovered losses after Chinese data showed exports rising 9.9 per cent in September and imports swinging to a 13.2 per cent jump versus a 2.1 per cent drop in August.
The data, which suggests Chinese exporters are recovering briskly from the pandemic’s hit to overseas orders, helped MSCI’s broadest index of Asia-Pacific shares outside Japan gain 0.1 per cent after earlier falling into negative territory.
Chinese blue chip shares also gained 0.3 per cent 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.
The MSCI world equity index, which tracks shares in nearly 50 countries, fell 0.1 per cent.
Yesterday, the Nasdaq Composite jumped 2.6 per cent, its biggest one-day rally in a month.
Wall Street gains were driven by Apple Inc, which surged 6.4 per cent ahead of the expected debut of its latest iPhone. Amazon, another of the Big Tech winners from the pandemic, rallied 4.8 per cent ahead of a major marketing event.
Biden bounce?
Investors are increasingly expectant of a victory for Democratic candidate Joe Biden in the US Presidential election next month. That would likely herald a big stimulus package to help the coronavirus-battered US 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 it we get a stimulus, but when.”
A Biden win is seen by some as negative for the US dollar, give the candidate’s pledge of higher corporate tax rates.
Still, the greenback rose 0.2 per cent against a basket of other major currencies to 93.214, trying to extend a rebound from Friday’s near-three-week low of 92.997 as market players favoured the dollar over riskier currencies.
The Chinese yuan fell 0.1 per cent to 6.7466 per dollar, after the central bank set a weaker than forecast midpoint, offsetting any boost from the trade data.
Elsewhere, the Australian dollar dropped as much as 0.6 per cent to US$0.7165 (RM2.97), not helped by media reports China has stopped taking shipments of Australian coal. — Reuters
