Global markets cautious as virus numbers rise

Published 12:03 pm Wednesday, October 14, 2020

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AP Business Writer
Global stock markets were subdued on Wednesday as the number of coronavirus cases grew in several major economies, leading to new restrictions on businesses.
Rising coronavirus counts in many countries are raising the urgency to develop vaccines and treatments and setbacks in that process tend to discourage investors.
On Tuesday, independent monitors paused enrollment in a study testing the COVID-19 antiviral drug remdesivir plus an experimental antibody therapy being developed by Eli Lilly. The company said the study was paused “out of an abundance of caution.” The news followed a disclosure late Monday by Johnson & Johnson, which said it had to temporarily pause a late-stage study of a potential COVID-19 vaccine “due to an unexplained illness in a study participant.”
Wall Street looked poised for a steady open, with the future contracts for the S&P 500 down 0.1% and those for the Dow industrials trading flat.
In Europe Germany’s DAX shed 0.2% to 12,993 and the CAC 40 in Paris fell 0.2% to 4,935. Britain’s FTSE 100 also declined 0.2% to 5,956 as talks on a new trade deal with the European Union appeared set to continue for days or weeks longer.
Earnings have largely been relatively upbeat so far in the U.S., with UnitedHealth in the U.S. also topping forecasts on Wednesday. United Airlines is due to publish its figures later in the day.
Uncertainty about the prospects for more stimulus for the U.S. economy also continues to hang over markets.
“As U.S. case counts heads north into October, the market is evidently still very much sensitive to the twist and turns of the vaccine development and perhaps now more than ever still lacking another fiscal injection to plug the gap into the year-end,” Jingyi Pan of IG said in a commentary.
U.S. Senate Majority Leader Mitch McConnell said Tuesday that he’s scheduling a vote on a scaled-back GOP coronavirus relief bill for Oct. 19. Democrats filibustered a GOP-drafted aid bill last month and recent talks on a larger deal with House Speaker Nancy Pelosi, D-Calif., fell apart this past weekend. In a letter to colleagues Tuesday, Pelosi called the White House’s latest proposal insufficient and said significant changes are needed.
“The cold reality that markets have refused to countenance is that even if an agreement was reached, its chances of being enacted before the November election are about zero,” said Jeffrey Halley of Oanda. “Still, this is 2020, the year where markets never let reality get in the way of a good story.”
Japan’s Nikkei 225 erased early losses to gain 0.1% to 23,626.73, while the Hang Seng in Hong Kong eked out a late gain of 0.1%, at 24,667.09. South Korea’s Kospi lost 0.9% to 2,380.48 and the S&P/ASX 200 in Australia declined 0.3% to 6,179.20. The Shanghai Composite index shed 0.6% to 3,340.78.
The Bank of Korea opted to keep its benchmark interest rate unchanged, as did Singapore’s Monetary Authority.
In energy markets, the benchmark U.S. crude oil contract lost 12 cents to $40.08 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, shed 7 cents to $42.38.
The dollar weakened to 105.36 Japanese yen from 105.47 yen. The euro slipped to $1.1742 from $1.1748.

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