(Bloomberg) -- Stocks sank in Europe alongside U.S. equity futures on Thursday as investors sized up government efforts to contain the coronavirus. Treasuries rallied with the yen and gold.
The Stoxx Europe 600 Index reversed an early advance as all 19 industry groups dropped into the red. Contracts on the S&P 500 pointed to a retreat on Wall Street after California declared a state of emergency due to the pathogen. A day earlier the gauge had jumped more than 4% in the wake of the U.S. House authorizing $7.8 billion for virus prevention.
The main equities benchmark in Asia headed for a fourth straight gain. Chinese stocks jumped to their highest in two years, erasing the last of the declines triggered by the coronavirus outbreak. Australia’s finance minister said stimulus will come very soon as speculation grew that governments will do more to combat its economic impact. The Treasuries yield curve has steepened this week, a sign investors see more U.S. stimulus coming.
Risk assets remain choppy, with traders still on edge amid a rise in virus cases around the world and as many governments also extend quarantines and travel restrictions. The S&P 500 has rallied about 6% this week, a rebound that began late Friday when the Federal Reserve pledged action. The gauge remains about 7.5% below last month’s all-time high.
Investors are struggling to find the correct balance between two factors, RaboBank strategists led by Richard McGuire wrote in a note. One is “the need to de-risk on the back of virus-related fundamental concerns,” and the other is “the growing appeal of risky assets in the wake of an unfolding coincidental, or perhaps co-ordinated, global policy response.”
Elsewhere, oil fluctuated amid a split between Saudi Arabia and Russia over whether deeper production cuts are required to offset the demand hit from the coronavirus epidemic. Emerging-market stocks advanced.
These are the main moves in markets:
Stocks
The Stoxx Europe 600 Index declined 1.4% as of 10:33 a.m. London time.Germany’s DAX Index fell 1.4%.Futures on the S&P 500 Index decreased 1.9%.The MSCI Asia Pacific Index gained 1.3%.
Currencies
The Bloomberg Dollar Spot Index declined 0.2%.The euro gained 0.4% to $1.1177.The British pound rose 0.4% to $1.2928.The Japanese yen strengthened 0.6% to 106.87 per dollar.The South Korean Won strengthened 0.5% to 1,181.30 per dollar.
Bonds
The yield on 10-year Treasuries sank nine basis points to 0.97%.The yield on two-year Treasuries decreased seven basis points to 0.62%.Germany’s 10-year yield dipped less than one basis point to -0.64%.Japan’s 10-year yield gained one basis point to -0.112%.Australia’s 10-year yield increased six basis points to 0.784%.
Commodities
West Texas Intermediate crude sank 0.9% to $46.36 a barrel.Iron ore increased 0.3% to $88.50 per metric ton.Gold strengthened 0.6% to $1,646.53 an ounce.
To contact the reporters on this story: Todd White in Madrid at twhite2@bloomberg.net;Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editor responsible for this story: Sam Potter at spotter33@bloomberg.net
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https://finance.yahoo.com/news/asia-extend-global-stock-rally-231651748.html
2020-03-05 10:38:00Z
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