Volatile week ahead amid Covid, US jitters

Business | Reuters and Winnie Lee 27 Oct 2020

Hong Kong's stock market is expected to be volatile this week as global equities fell on the worsening coronavirus situation in Europe and the United States, where the presidential election is to take place next Tuesday.

The United States has seen its highest ever number of new Covid-19 cases in the past two days, while France also set case records and Spain announced a state of emergency.

US equity futures dropped on concerns that rising coronavirus cases will weaken the economy. That combined with no clear progress on a US stimulus package and caution ahead of November 3 US election to drag the MSCI world equity index down.

In Europe, the Euro Stoxx 600 shed 1.08 percent, while S&P 500 was 0.95 percent lower in early trading.

Japan's Nikkei finished 1 percent lower, and South Korea's main index lost 0.7 percent.

In mainland China, the Shanghai Stock Exchange Composite Index dropped 0.82 percent or 26.88 points to 3,251, while the Shenzhen Stock Exchange Composite Index rose 0.52 percent or 11.51 points to 2,212. Meanwhile, the country's leaders met to chart the nation's economic course for 2021-2025, balancing growth with reforms amid an uncertain global outlook and deepening tensions with the US.

The People's Bank of China set the midpoint of the yuan's daily trading band at 6.6725 per one US dollar, slightly weaker than the previous fix of 6.6703. Analysts said the yuan, which has rallied over 7 percent since May, was likely to resume its rise, supported by China's strong recovery and high-interest rates.

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