Markets mostly in reverse after latest stocks surge
July 7, 2020 06:23 PM
Stock markets mostly slid Tuesday, as traders booked profits after strong gains for global equities won the previous session.
"Stocks in London and on the continent are lower as the EU Commission issues a bleak outlook for GDP growth, pouring cold water on the economic recovery narrative that had held sway over the past few sessions thanks to data from the US and China," said Chris Beauchamp, chief market analyst at IG trading group.
European indices followed Tokyo lower, weighed down by a European Commission forecast that the eurozone economy will plunge 8.7 percent in 2020 owing to the coronavirus crisis -- before rebounding 6.1 percent next year.
Asian equities kicked off the losses Tuesday following a rally helped by strong economic data offsetting fears over a spike in new virus infections. "After an impressive rally in the previous session, which saw the Nasdaq reach a new all-time high, the S&P close higher for a fifth straight session and the FTSE book a two-percent gain, investors are pausing for breath on Tuesday," noted Fiona Cincotta, analyst at City Index.
"Except in China that is, where the state talking up the importance of fostering a healthy bull run in the markets is ensuring that investors are ploughing in for a sixth straight session, bringing gains in the Shanghai composite this month to 13 percent."
Sydney's main stocks index flattened, as authorities in Australia said more than five million residents of Melbourne, the country's second-biggest city, will be locked down for six weeks after virus cases there surged. While several countries are suffering a fresh surge in infections -- particularly the United States -- the easing of lockdown measures and reopening of economies has been the key driver of a months-long surge across equities.
On Monday there was more positive data, with an index of the US service sector -- which makes up the vast majority of the economy -- seeing its biggest-ever jump in June to beat forecasts. And in a sign that the reporting season could be positive, Samsung Electronics said Tuesday it expects to see operating profit jump 23 percent in the second quarter, which is much better than the single-digit fall that analysts had forecast.
Key figures around 1115 GMT
London - FTSE 100: DOWN 1.3 percent at 6,206.85 points
Frankfurt - DAX 30: DOWN 1.2 percent at 12,586.36
Paris - CAC 40: DOWN 1.0 percent at 5,030.80
EURO STOXX 50: DOWN 1.0 percent at 3,315.62
Tokyo - Nikkei 225: DOWN 0.4 percent at 22,614.69 (close)
Hong Kong - Hang Seng: DOWN 1.4 percent at 25,975.66 (close)
Shanghai - Composite: UP 0.4 percent at 2,245.34 (close)
New York - Dow: UP 1.8 percent at 26,287.03 (close)
West Texas Intermediate: DOWN 1.2 percent at $40.15 per barrel
Brent North Sea crude: DOWN 1.0 percent at $42.68
Euro/dollar: DOWN at $1.1279 from $1.1308 at 2100 GMT
Dollar/yen: UP at 107.68 yen from 107.39 yen
Pound/dollar: UP at $1.2495 from $1.2489
Euro/pound: DOWN at 90.26 pence from 90.53 pence