Global stocks pull back as acrimonious U.S. debate stokes caution
LONDON/SINGAPORE (Sept 30) - World stocks fell and safer assets, such as the yen and dollar, found buyers on Wednesday after a chaotic first U.S. presidential debate and rising COVID-19 cases turned investors cautious, though strong factory surveys boosted China’s markets.
President Donald Trump and Democratic rival Joe Biden battled fiercely over Trump’s record on the coronavirus pandemic, healthcare and the economy in a bad-tempered first debate marked by personal insults and Trump’s repeated interruptions.
U.S. stock futures had nudged higher during the debate but then retreated as Trump cast doubt on whether he would accept the election’s outcome if he lost.
Asian trading had been choppy rather than outright weak but Europe sank 0.5% early on amid worries too over the steep rises in coronavirus infections across the region again.
“The debate just added to the confusion about how the election will run,” said SEB investment management’s global head of asset allocation Hans Peterson. “But financially it doesn’t change anything”.
S&P 500 futures were last 0.6% lower, with Dow Jones and Nasdaq 100 futures down by as much as 1%.
The U.S. dollar crept higher and is set for its best monthly gain since July 2019, while the yen rose 0.2% to 105.50 per dollar, its strongest daily rise in nearly two weeks.
“The share market normally prefers the incumbent (president) to win,” said Shane Oliver, head of investment strategy at AMP Capital in Sydney. “U.S. futures initially rose, as perhaps Trump delivered some punches, but it wasn’t enough,” he said.
Markets globally, most of which are headed for their first monthly retreats since March’s meltdown, either deepened losses or pulled back from highs scaled after data showed China’s economic recovery remains on track.
MSCI’s broadest index of world shares which tracks nearly 50 countries dropped 0.2% for a 4% September loss. Oil is down just over 10% this month while gold’s 4.1% drop will make it its worst month since late 2016.
Asia had held its ground overnight, led by a 0.8% gain in Hong Kong, though Japan’s Nikkei fell 1.5% and Australia’s S&P/ASX 200 lost over 2%.
Chinese property developers gained, led by a 15% jump in Evergrande shares after the heavily-indebted giant reached a deal to ease cash crunch concerns.
China’s factory activity expansion accelerated in September, helped by rising export orders.
The official manufacturing Purchasing Manager’s Index (PMI) rose to 51.5 in September from 51.0 in August. Analysts had expected it to pick up slightly to 51.2.
Reuters
