Global stocks pull back as COVID infection rate weighs down

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2/2© Reuters. People wearing face masks, following a coronavirus outbreak, are reflected on a screen showing the Nikkei Index, outside a brokerage in Tokyo

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By Simon Jessop and Swati Pandey

LONDON / SYDNEY (Reuters) – Global stocks fell again on Friday and backup havens got a boost as nervousness over the rising global COVID-19 infection rate and the US presidential election of the next week weighed on sentiment.

A strong central bank-fueled rebound after the pandemic’s initial slide earlier in the year failed this week amid concerns of an even worse second wave of infections, especially in Europe, which is dissipating markets.

Global equities () were down 0.3% at 7:17 a.m. GMT, following weakness in Asia and signaling a likely lower open on Wall Street later in the day. Gold rose as spot prices climbed 0.2% to $ 1,871 an ounce.

In Europe, the blue-chip EuroSTOXX 50 () fell 0.6% to bring its weekly loss to 6.8% and leave it at levels last seen at the end of May.

The MSCI’s largest Asia-Pacific stock index outside of Japan () was last down 1.2%, on track to break a four-week streak of straight gains.

US equity futures () (), meanwhile, showed declines of around 1.4% to 1.9%.

“The new lockdowns across Europe are being harshly reassessed by the markets”, Barclays (LON :), equity strategist Emmanuel Cau said in a note to clients.

“With complacency moving quickly, this decline could end up offering another good entry point, but a lot depends on the outcome of the election and the timing of the results. ”

The weak sentiment that dragged Europe down came despite the previous day’s pledge for more help from the European Central Bank at its next meeting in December to help counter the potential economic shock of the pandemic.

This week, coronavirus cases around the world increased by more than 500,000 for the first time, with France and Germany preparing for new lockdowns.

In response, analysts are forecasting an expansion and extension of the ECB’s emergency pandemic purchasing program, a lower deposit facility rate, and even more generous loan terms for banks in December.

The announcement dragged the euro () to a four-week low at $ 0.1648 before rising slightly on Friday to trade at $ 1.1668, down about 0.4% year-to-date of the month.

The (), meanwhile, remained stable, supported by a strong session on Wall Street overnight after strong quarterly reports from some of the major tech giants and data showing the U.S. economy has grown at a record annualized pace of 33.1% in the third quarter.

“Even with the rebound, US production remains 3.5% below its pre-COVID levels. The path to recovery is much less clear from here, especially as the number of virus cases rises and there are short-term obstacles to a budget deal, ”ANZ analysts wrote. in a note.

Brent was also stable in early trades in Europe () while US crude () was up 0.2% to $ 36.27.

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