World stocks slide on worries over pandemic, recovery

Shares slipped in Asia and Europe on Wednesday after a lackluster session on Wall Street, where weak jobs data and pandemic concerns weighed on sentiment

Representative Image
Representative Image


Shares slipped in Asia and Europe on Wednesday after a lackluster session on Wall Street, where weak jobs data and pandemic concerns weighed on sentiment.

Tokyo's benchmark rose after economic growth for the April-June quarter was revised upward to an annualised 1.9% from an earlier estimate of 1.3%.

Any feel-good factor was ignored, though, given the climb was less than half of the 4.20% fall in Q1," Jeffrey Halley of Oanda said in a commentary. Japan will be lucky to break even this year as the current Covid-19 wave will almost certainly have weighed on domestic consumption," he said.

Germany's DAX lost 1.5% to 15,599.69 and the CAC 40 in Paris declined 1.4% to 6,630.07 In London, the FTSE 100 gave up 1.1% to 7,072.28, The future for the Dow industrials shed 0.5% and that for the S&P 500 slipped 0.4%.

In Asian trading, Japan's Nikkei 225 index rose 0.9% to 30,181.21, while the Hang Seng in Hong Kong shed early gains, falling 0.1% to 26,320.93. The Shanghai Composite index gave up 1.4 points to 3,675.19. In Seoul, the Kospi lost 0.8% to 3,162.99. Australia's S&P/ASX 200 lost 0.2% to 7,512.00.

Japan's ruling Liberal Democratic Party is due to elect a new prime minister to succeed Yoshihide Suga, adding to uncertainty over future policy, but fresh stimulus for the world's third-largest economy is expected in the coming weeks, analysts say.

On Tuesday, US traders returned from the Labour Day holiday weekend to a relatively light week of economic data, after the last big economic snapshot, the August jobs report, came in weaker than expected last Friday.

Scratching my head to make sense of it all, it appears that US markets are concerned about the hoped-for post-pandemic recovery being somewhat less exuberant than hoped," Halley said.

The S&P 500 fell 0.3% to 4,520.03. The Dow Jones Industrial Average dropped 0.8% to 35,100, while the technology-heavy Nasdaq composite rose 0.1% to 15,374.33, it's fourth consecutive record high.

Small company stocks declined. The Russell 2000 index lost 0.7% to 2,275.61.

A rise in bond yields helped out bank stocks. The yield on the 10-year Treasury note rose to 1.37% from 1.32% on Friday.

Volatility is expected to pick up in the coming days and weeks, after stocks churned higher throughout the summer, helped by stronger-than-expected earnings from big companies and guidance from the Federal Reserve that the central bank plans to keep interest rates low.

On Wednesday, the Labor Department will report job openings for July. The jobs market is still struggling to recover from the pandemic and employers have been finding it difficult to fill openings amid lingering health fears and the resurgent virus could make it even more difficult.

On Friday, investors will get another update on inflation when the Labor Department reports on inflation at the wholesale level before costs are passed on to consumers.

In other trading, benchmark US crude oil gained 36 cents to 68.71 per barrel. It lost 94 cents to 68.35 per barrel on Tuesday. Brent crude, the international standard for pricing oil, picked up 30 cents to 71.97 per barrel.

The dollar fell to 110.18 Japanese yen from 110.29 yen. The euro weakened to 1.1824 from 1.1841.

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