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GLOBAL MARKETS-Tech lifts world stocks as economy back in focus – Devdiscourse


World shares stabilized and the dollar rose on Wednesday with overnight gains of stay-at-home Wall Street tech champions helped balance concerns that new restrictions to counter resurging coronavirus infections will hurt the economic recovery. The first indications from global surveys about economic activity in September gave a gloomy picture for Europe with rising COVID-19 infections leading to a downturn in services.

MSCI’s world equity index, which tracks shares in 49 countries, was 0.2% higher by 0821 GMT, while the pan-European STOXX 600 benchmark rose 1.1%. Tech shares were the strongest gainers in Europe following a rally overnight in big U.S. tech stocks Amazon, Microsoft, and Apple.

“This strong performance on the part of U.S. stocks is likely to translate into a similarly positive open for European stocks,” said Michael Hewson, an analyst at CMC Markets in London. “However there is rising concern that in light of surging infection rates across Europe, and the beginnings of a rise in hospitalizations, that the economic rebound from the lockdown lows is set to finish the year with a whimper,” he added.

The PMI survey showed eurozone business growth ground to a halt this month as the service industry shifted into reverse, knocked by a resurgence in coronavirus cases that pushed governments to reintroduce restrictions. French business activity slowed to a four-month low in September, while Germany’s private sector continued to recover from the coronavirus shock.

Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2% for its first gain this week, but the mood was hardly bullish. Japan’s Nikkei returned from a two-day holiday to slip 0.1%. Nasdaq futures remained near Tuesday’s highs, up 0.1%. S&P 500 futures were 0.3% higher.

In foreign exchange markets, the standout mover was the gaining dollar, which was up 0.10% against a basket of six major currencies at its highest level since July 27. “Risk aversion on the back of new COVID-19 infections affecting Europe more directly remains an important factor this week,” UniCredit strategists said in a note. “This means that the USD is likely to remain firm in its role as a preferred safe-haven currency.”

Meantime the euro hit a seven-week low and was last down 0.12% at $1.1693, on concerns about coronavirus infections and after the tepid European surveys. Commodities were also weighed down by the robust dollar and worries linked to the economic impact of the second wave of COVID-19.

“A resurgence in cases could prove to be a stumbling block for the demand recovery, although any lockdowns moving forward are likely to be more targeted and localized,” said ING commodity strategists Warren Patterson. Brent crude futures were last down 0.2% at $41.64 a barrel and U.S. crude futures slipped 0.3% to $39.69.

Gold prices touched a six-week low as the dollar strengthened. Spot gold fell 1.2% to $1,875.7 per ounce. In bond markets, Italy’s 30-year bond yield fell to a record low as the country’s debt remained supported after local elections reduced the risk of a snap election.

U.S. bonds were steady, with the yield on benchmark 10-year U.S. debt US10YT=RR up less than one basis point at 0.6724% For Reuters Live Markets blog on European and UK stock markets, please click on:



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