You are here

Major US indices pushed into the red, oil prices fall amid uncertainty

Tokyo’s benchmark Nikkei index 1per cent up

By AFP - Jun 27,2020 - Last updated at Jun 27,2020

A pedestrian walks past an electronic quotation board displaying share prices of the Tokyo Stock Exchange in Tokyo on Friday (AFP photo)

NEW YORK — Wall Street stocks suffered their second rout in three sessions on Friday as surging coronavirus cases prompted large US states to impose new public health restrictions, threatening the economy's recovery from widespread business shutdowns.

Major US indices fell around 2.5 per cent or more to finish the week in the red.

Meanwhile, Tokyo's benchmark Nikkei index closed up 1 per cent on Friday as investors took heart from US earlier rallies despite the spike in coronavirus cases.

The Nikkei 225 rose 1.13 per cent, or 252.29 points, to close at 22,512.08. Over the week, it edged up 0.15 per cent.

The broader Topix index was up 0.99 percent, or 15.52 points, at 1,577.37, but lost 0.34 per cent from a week before.

"The Japanese market is advancing against the backdrop of rallies in US shares," said Okasan Online Securities, predicting that investors would be unlikely to gamble too heavily ahead of the weekend.

Analysts were balancing the negative impact of a potential second coronavirus wave with the floods of money pumped into the market by financial authorities.

"Investors are concerned about an increase in infections globally, but sentiment remained positive as major economies continued making efforts to reopen their economies," Toshikazu Horiuchi, a broker at IwaiCosmo Securities, told AFP.

Market watchers were shifting their focus on key economic indicators to be released in the US soon, Horiuchi added.

Earlier, European bourses finished mostly lower, while oil prices fell on worries about weakening demand.

Investor confidence in a US economic recovery is "being stymied by lingering COVID-19 concerns as new cases persist", said analysts at the Charles Schwab brokerage.

Texas and Florida, two of the most-populous states in the country and other southern and western states, including Arizona and Georgia, have seen big jumps in cases.

"We are facing a serious problem in certain areas," top infectious disease expert Anthony Fauci said on Friday as the Trump administration's coronavirus task force held its first public briefing in two months.

Stocks have been volatile this week as investors try to assess the implications of the current phase of the coronavirus crisis and whether it will be as devastating to the economy as the shutdowns earlier this year.

"A big portion of the rally that equities enjoyed between late March and early June was down to the chatter that lockdown restrictions will be eased, and then they were eased, so now there are fears the process could be reversed," said CMC Markets UK analyst David Madden. 

But there were other significant factors in Friday's rout on Wall Street, which pushed all three major indices into the red for the week. 

Large banks, including Bank of America and Goldman Sachs fell more than six per cent after the Federal Reserve late Thursday ordered the industry to suspend buybacks and limit dividend payments amid uncertainty over the coronavirus.

Facebook dove 8.3 per cent as it faced a widening boycott from major advertisers due to criticism it has not done enough to crack down on hate speech and incitements to violence.

After Unilever joined Verizon among the large companies suspending spending on the platform, Chief Executive Mark Zuckerberg said Facebook would ban a "wider category of hateful content".

 

up
14 users have voted.

Add new comment

CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
3 + 0 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.

Newsletter

Get top stories and blog posts emailed to you each day.