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Home / Business News / European Stocks Slide to 1-Month Low; Futures Drop: Markets Wrap

European Stocks Slide to 1-Month Low; Futures Drop: Markets Wrap

The Stoxx Europe 600 Index lost 0.9% and reached the lowest level in a month and the MSCI Asia Pacific Index fell 0.6%.

business Updated: Oct 22, 2020, 13:32 IST
Bloomberg | Posted by Nilavro Ghosh
Bloomberg | Posted by Nilavro Ghosh
Bloomberg
The American presidential election also remains at the forefront for investors, who were recently pricing in a lower likelihood of a contested legal battle after the vote
The American presidential election also remains at the forefront for investors, who were recently pricing in a lower likelihood of a contested legal battle after the vote(AP)

Global stocks and S&P 500 equity futures slumped as investors worried about delays to U.S. economic stimulus, the impact about surging virus cases across Europe and the possibility of American election interference.

The Stoxx Europe 600 Index lost 0.9% and reached the lowest level in a month. The MSCI Asia Pacific Index fell 0.6%. Treasury yields fell, though remained above the 0.8% level. Other haven assets were mixed, with the dollar trading little changed and gold declining.

“There is increasingly a recognition that no fiscal package agreement ahead of the election is likely,” said James McCormick, global head of desk strategy at NatWest Markets. “The Covid-19 resurgence is certainly a background issue for risk assets, but the fiscal debate in the U.S. has been the main short-term question.”

U.S. shares closed lower on Wednesday after a volatile session amid signs that a stimulus package is unlikely to become law before the election. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin made progress in their latest talks and will speak again Thursday even as the odds remained long for a deal that could pass in the Senate.

Around the world, there is increasing evidence that the pandemic is starting to worsen. Germany’s new infections have jumped to a record, while Spain and France are now the first nations in Western Europe with 1 million cases.

U.S. hospitalizations for Covid-19 have reached a two-month high, led by the Midwest. New York state’s new virus cases exceeded 2,000 for the first time since May.

The American presidential election also remains at the forefront for investors, who were recently pricing in a lower likelihood of a contested legal battle after the vote.

The top U.S. spy chief accused Iran of making its most direct efforts to interfere in the closing days of the presidential election. John Ratcliffe, the director of national intelligence, said both Iran and Russia had obtained voter registration information and that Tehran was already using it to send threatening emails.

With no meaningful progress on fiscal policy, markets “are reacting to the heightened political instability that comes with the confirmation of efforts to manipulate the presidential race,” said Eleanor Creagh, Sydney-based strategist at Saxo Capital Markets. “The ability for either candidate to seize upon accusations of foreign interference is heightened and raises the probability of a contested outcome, particularly as the race could be closer than polls currently indicate.”

ht epaper

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