News24.com | Stock retreat as Covid fears advance thumbnail

News24.com | Stock retreat as Covid fears advance

Globe with digital tablet, laptop and smartphone showing international markets.

Globe with digital tablet, laptop and smartphone showing international markets.

  • Stock markets slid Tuesday, with Wall Street continuing to retreat from record highs and Japan fearing a renewed Covid-19 surge.
  • Japan’s Nikkei ended the day down 2% after investors took in calls for new states of emergency in the Osaka region and possibly Tokyo.

  • Wall Street’s main indices ended the day lower on Monday, and fell further at the opening of trading on Tuesday, with the Dow giving up 0.4%.

Stock markets slid Tuesday, with Wall Street continuing to retreat from record highs and Japan fearing a renewed Covid-19 surge.

Both the Dow and the S&P 500 finished last week at new peaks and also posted their fourth consecutive weekly gains, following on the heels of strong data for American housing starts, employment and retail sales.

But analysts said that a combination of some dollar weakness and a lull in fresh data ahead of upcoming corporate results had dampened enthusiasm.

“It seems like investors might be having a bit of a second thought up here as US earnings season starts to heat up and peak optimism is beginning to set in,” said Stephen Innes of Axi.

Wall Street’s main indices ended the day lower on Monday, and fell further at the opening of trading on Tuesday, with the Dow giving up 0.4%.

“There are some festering concerns about rising coronavirus cases around the world, ongoing lockdown restrictions around the world, and vaccination efforts around the world that aren’t up to full speed for a variety of reasons, including supply problems,” said Patrick O’Hare at Briefing.com.

Japan’s Nikkei ended the day down two percent after investors took in calls for new states of emergency in the Osaka region and possibly Tokyo, prompted by rising case numbers.

The new measures could involve tougher restrictions including asking shops and restaurants to close, according to local media.

“Along with increased new coronavirus infections, the possibility of a state of emergency declaration is growing, which is turning on an amber light for economic recovery,” Okasan Online Securities said in a commentary.

NAB analyst Rodrigo Catril added that “US dollar weakness… mostly appears to be driven by European strength.

“The market has become slightly more optimistic around the European vaccine rollout and economic outlook of late… As the rollout picks up, European equities should also start to outperform,” he added.

However they were lower in afternoon trade, with London and Paris down more than one percent, and Frankfurt off 0.8%.

Wall Street’s dream run was also likely to lose momentum with an ongoing Senate battle in Washington over the size of proposed corporate tax increases and the extent of infrastructure stimulus, Catril added.

Oil prices rose modestly.

Axi’s Innes cautioned the commodity was still “trading on a jittery note” in the wake of rising coronavirus cases in Asia.

Expectations that the United States and Iran could eventually return to a nuclear deal, potentially within weeks, were also stabilising price growth, he added.


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