Stocks and oil slide, but Chinese stocks boom

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NEW YORK (Reuters) – Investor caution over renewed coronavirus blockages on Tuesday stifled a five-day rally on most global stock markets and weighed on oil prices, though it was not enough end a strong wave of Chinese titles.

FILE PHOTO: Traders wear masks while working on the floor of the New York Stock Exchange as the epidemic of coronavirus disease (COVID-19) continues in the Manhattan neighborhood of New York, United States , May 27, 2020. REUTERS / Lucas Jackson

The dollar rose slightly as risky currencies such as the Australian dollar took a break from recent gains and gold plunged as investors made profits after bullion rallied to near peak eight, trading around $ 1,780 an ounce.

The London, Paris and Frankfurt stock markets fell 1% or more, while stocks fell much less on Wall Street, with the Nasdaq trading slightly higher.

Yields on US Treasuries have declined as the increase in the number of COVID-19 files has raised concerns about plans to reopen the economy. The greater Miami area of ​​Florida has become the latest hot spot for the American coronavirus to cancel its reopening. Tens of thousands of cases have exploded in the country and the death toll in the United States has exceeded 130,000.

Investors remain concerned about the US economic outlook, said Jim Barnes, director of fixed income for Bryn Mawr Trust in suburban Philadelphia in Berwyn.

“Economic conditions still have a long way to go to return to pre-crisis levels,” he said.

The MSCI All Country World Index, which tracks stocks in 49 countries, fell 1.64 points, or 0.3%, while the broad FTSEurofirst 300 index in Europe fell 0.64%.

On Wall Street, the Dow Jones Industrial Average fell 165.47 points, or 0.63%, to 26,121.56, and the S&P 500 lost 1.98 points, or 0.06%, to 3,177.74. . But the Nasdaq Composite added 52.18 points, or 0.5%, to 10,485.83. The Nasdaq has established a new intraday peak.

Lockdowns were also re-imposed on Melbourne, Australia, confining its nearly 5 million residents to all but essential travel for another six weeks.

“Just when many parts of the world appeared to have mastered the coronavirus pandemic, many jurisdictions reimposed blockages to contain a wave of new cases,” said Luca Paolini, chief strategist at Pictet Asset Management.

Corporate profits are expected to drop by around 20% this year after the deepest recession in more than a century. Pictet expects a drop of 30% to 40%.

“But that doesn’t mean the equity and corporate bond markets are expected to go down sharply,” said Paolini, predicting that the US Federal Reserve would inject an additional $ 1.3 trillion in stimulus this year and that the Bank European Central will add an additional 1.1 trillion euros (1.24 trillion dollars). ).

The euro was down 0.20% for the last time to $ 1.1285.

The eurozone economy will plunge into a deeper-than-expected recession this year and will take longer to rebound, according to European Commission forecasts. We expect a record decline of 8.7% and a recovery of 6.1% in 2021. The commission had forecast in May a drop of 7.7% and a rebound of 6.3% in 2021.

The dollar index, which tracks the greenback against a basket of six currencies, rose 0.22% to 96.942. The yen rose 0.20% to $ 107.5700.

Analysts said Chinese government signals through a state-sponsored newspaper “promoting a healthy bull market” published on Monday had helped the Chinese stock buying spree.

Copper prices have soared to their highest level in more than five months due to the strong demand outlook for the main Chinese consumer and concerns over supplies from Chile, the world’s largest producer of red metal.

The top-ranked Shanghai index spat at the close after adding 15% to earnings last week.

(Graphic: the biggest stock exchanges in the world since the beginning of 2020, here)

(Graphic: Coronavirus and financial markets, here)

(This story goes back to correct the letters lost in the title.)

Reporting by Herbert Lash, with additional reporting by Ross Kerber in Boston; Editing by Bernadette Baum

Our standards:Principles of the Thomson Reuters Trust.

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