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Global Stock Indices Drop Further

September 9, 2020

Global Stock

Global equity markets and oil prices tumbled on Tuesday as a sharp sell-off in technology stocks and rising concerns over Britain leaving the European Union without a trade agreement threatened the rally which had previously pushed world shares near record highs despite the coronavirus pandemic.

Renewed tensions between Washington and Beijing appeared to have a little impact after U.S. President Donald Trump again raised the idea of decoupling the U.S. and Chinese economies.

The emerging markets index (MSCI), measuring stocks across the globe, shed 2.08% following broad declines in Europe and modest gains in Asian markets.

On Wall Street, the Dow Jones Industrial Average fell 632.75 points (2.25%), to $27,500.56, the S&P 500 lost 95.14 points (2.78%), to $3,331.82 and the Nasdaq Composite dropped 465.44 points (4.11%), to $10,847.69.

In foreign exchange markets, the DXY rose slightly against a basket of currencies at 93.291 and stood up against the EUR/USD pair at $1.1800 with the main focus on Thursday’s ECB policy meeting.

Most analysts do not expect a change in the central bank’s policy stance but are looking at its inflation forecasts and whether an accommodative tone could help cool down the surge in the EUR single currency.

Investors moved into the perceived safety of U.S. government bonds. Benchmark 10-year notes last rose 12/32 in price to yield 0.6853%, from 0.723% late on Friday.

Oil fell on worries that a recovery in demand could weaken as coronavirus infections flare up around the world.

U.S. crude recently fell 7.19% to $36.91 per barrel and Brent was at $40.07, down 4.62% on the day.

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