South Africa

News24.com | Asian markets drop again as election jitters set in

Asian markets tumbled Friday with investors spooked by soaring virus cases in Europe and the United States that have forced fresh lockdowns, while uncertainty ahead of next week's US election was also dampening sentiment.

Regional traders brushed off a healthy rebound on Wall Street and forecast-beating economic growth data out of Washington, with analysts warning that a new infection surge and failure to pass a new stimulus would likely knock the recovery off track.

Equities have had a torrid week as governments are forced to act to contain a second wave of disease in the northern hemisphere, with France essentially shutting down for November, Germany putting tough measures in place and several other countries in danger of having to follow suit.

European Central Bank boss Christine Lagarde noted the eurozone was facing a tough few months, saying Thursday that the economy was "losing momentum more rapidly than expected" after a partial rebound in the summer, adding that risks were "clearly tilted to the downside".

However, on a positive note she hinted that the bank could unveil fresh measures to keep credit flowing.

Eyes are now on Tuesday's presidential election, with expectations Joe Biden will win the White House, while Democrats could sweep both houses of Congress, which observers say could see the passage of a huge new stimulus.

But despite Biden being well ahead of Donald Trump in national and battleground polls, traders remain nervous that the president could contest any tight result, having spent much of the campaign warning of mail-in voter fraud.

"There is going to be more volatility ahead of the election," Quincy Krosby, of Prudential Financial, told Bloomberg TV.

"Over the weekend folks are going to be focused on (key battleground state) Pennsylvania to see whether or not Biden is gaining there. The concern is if he gains a little bit, that may be one where you could actually look to a contested election," she added.

US economy's false dawn?

Trump on Thursday claimed a triumph with data showing the world's top economy expanded a record 33.1% in the third quarter, warning in a tweet that Biden would ruin the recovery.

However, analysts pointed out that the figure came after a 31.4% drop in the previous three months and was driven by consumer spending supported by a massive $3 trillion in government aid, much of which has since expired.

"Even with the sharp rebound seen in the third quarter, the level of GDP remains 3.5% below pre-pandemic levels with a large degree of spare capacity remaining," said National Australia Bank's Tapas Strickland.

"Higher-frequency data also suggests that growth has slowed over recent months, not helped by the resurgence of Covid-19."

Separate figures showed new applications for jobless benefits fell last week but remained at a mind-boggling 751 000.

Asian markets extended the week's losses, with tech firms weighed by warnings from US giants including Apple, Amazon and Facebook that the outlook was murky owing to the impact of the coronavirus.

Hong Kong shed two percent and Seoul dived 2.6%, while Tokyo and Shanghai were more than 1% down. There were also big losses in Sydney, Mumbai, Taipei, Singapore, Bangkok and Wellington.

London, Paris and Frankfurt all fell at the open.

However, OANDA's Edward Moya offered a note of hope, saying that while the virus is resurgent, "the world is better prepared to (deal with) Covid-19 over the winter months and hopes are still high that treatments and vaccines will get approvals before year end".

Oil prices climbed in early trade following another hefty loss Thursday that sent the commodity to four-month lows, though observers warned that the imposition of new lockdowns and containment measures would keep gains limited and likely spark further selling.

Football news:

Holand continues to insist that he is a monster. Fastest in the history of the Champions League scored 15 goals (and added 16)
Koeman on the victory over Dynamo Kyiv: We achieved our goal-we reached the playoffs
Solskjaer on 4:1 with Istanbul: Manchester United played intensely, enjoyed the match. We want to be 1st in the group
Forward Ferencvaros Troll Cristiano: celebrated a goal in his style. Ronaldo responded with a goal and a very angry look
Morata scored 5 goals in 4 games in the Champions League for Juve. His best result is 5 in 12 games in the 2014-15 season
Holand has scored 15 goals in the Champions League the fastest. 7 games better than the record
Ludicrous omission of the Champions League match: the Brugge forward did not want to transfer to the bus, and he was kicked out