Stock Market Today: Worries About Another Covid-19 Outbreak

The world market was shaken by the prospect of a new wave of coronavirus. This impact has been relatively mild in regions where the vaccination process is more rapid.

Europe finds the excuse to correct its losses

The European stocks didn’t have a good day this Tuesday. They started the day with contained decreases, but sales have been imposed little by little. The reductions were close to 2% in EuroStoxx and exceeded 1.5% in the German DAX. 

Equities started the day in moderation, with an eye on Wall Street, where red numbers predominated and ended the second day with declines. However, the expected news from the EMA about the Janssen vaccine has sparked strong sales. In the US, they have been contained, but in Europe, especially in the stock markets of Spain and Italy, which are more dependent on tourism, the falls have reached 3%. Sales for the rest of the indices have also accelerated.

A new blood clot warning hit the markets yesterday

Since the announcement of the European Medicines Agency approving the Janssen vaccine, the European market had been registering a solid overbought. Still, it took a slight disappointment for the markets to fall.

After admitting links to clot problems, investors started worrying about delays and limitations in use, as happened with the Astrazeneca vaccine, with similar issues.

Karim Moussalem from London-based Fitzgerald Europe stated that the market had run out of buyers. According to him, that’s what happens when a potentially very uncertain prospect suddenly opens up. 

He remarked that the airline, hotel, and travel sectors had suffered the most. And he mentioned that it makes perfect sense that they return to their lower price range.

Despite the fact, the EMA’s decision to resume the deployment of the Johnson & Johnson vaccine stimulated hope for a somewhat less distant return of normalcy in Europe. 

On Wednesday, the European stock markets opened higher after suffering their worst day of the year on Tuesday. At the time of writing, Euro Stoxx 50 gained 0.63% to 3965.1 units. The DAX posted an increase of 0.18% to 15157.460 units. 

Chinese stock market closed a bearish trading day

The Hang Seng, the Hong Kong Stock Exchange benchmark index, closed today with losses of 1.76%. The stock market replicated the downward trend of the leading Asian markets due to investors’ fears for the pandemic.

Between the sub-indices, only the most local survived. Among them, the services sector gained 0.25%. Meanwhile, Real Estate added 0.61%, and Finance climbed by 1.67%.  

Commerce and Industry dropped by 2.17%. The worst player was the clothing manufacturer Anta Sports, which plunged 7.67% after its majority shareholder announced the sale of 3.26% of the shares at 7.5%, lower than that of the last session’s closing.

This was a critical session for the digital giants as well. Meituan led the losses with a drop of 3.88%. Alibaba followed it with a 2.8% decline and Tencent, which yielded 2.17%.

The Financial sector ended red as well. The insurer AIA saw the worst decrease of 2.19%, and the bank HSBC dropped by 1.95%.

If not for the advance of Hang Lung Properties, the critical situation would also have been replicated in real estate. 

Among Chinese state securities, there is a significant difference between the session of operators. China Unicom climbed by 0.22%, and oil company Sinopec contracted by 5.88%.

The business volume of the session was 154,350 million Hong Kong dollars (19,882 million dollars).

Japan and India suffering another wave of Covid-19

Japan to India seemed poised to benefit from an acceleration in the global recovery. However, a surge in coronavirus cases in these countries hit Asian markets. The currencies of nations affected by the virus have underperformed those in which vaccines are making progress.

According to Paul Sandhu, director of multi-asset quantitative solutions at BNP Paribas, markets that have become too comfortable with reopening trade and loosening social restrictions may be at risk of Covid spikes. Contrarily, markets with high vaccination rates somewhat sidestep this downside risk.

The second day of correction on Wall Street

After a week marked by new all-time highs, the major US indices decided to take a pause. Investors are looking for new directions after first-quarter earnings reports from banks and waiting for the results of the technology companies. 

One of the significant declines was Tesla, which plummeted by 3.40%. 

The main wall street indices dropped from their record highs. The S&P 500 slipped by 0.68% or 28.32 points, to 4,134.94 units. Meanwhile, the Dow Jones lost 0.75% or 256.33 points, to 33,821.30 units.

Economists believe that since the market has taken a big jump to the upside, it needs to rest a bit. For now, it is just small profit-taking as traders await the results of the big names in technology on Wall Street. 

Investors turned to defensive sectors, which are considered relatively safe in times of economic uncertainty. They shifted to real estate, utilities, consumer staples, and healthcare sectors. Meanwhile, financial and energy stocks fell sharply.

Shares of airline and cruise ship operators such as JetBlue Airways, American Airlines, Norwegian Cruise Line, and Carnival Corp were hit last year during the shutdowns. Thanks to the hopes of reopening, they rose slightly. However, during yesterday’s trading, they dropped by around 5%.

JPMorgan Chase & Co, Bank of America Corp, Citigroup Inc, and Wells Fargo & Co led the declines for financial companies. According to Dick Bove, principal research analyst at Odeon Capital Group, the reason why this happened is analysts having reassessed their earnings reports.

Coinbase, the bridge between Wall Street and bitcoin

Coinbase, the cryptocurrency trading platform, debuted this week on the Nasdaq generating massive buzz. It is the first cryptocurrency-based company trading on NYSE. 

Before its debut on Wednesday, the shares were priced at $250. However, on their first day on the stock market, they were worth more than $429. Still, after the initial euphoria, Coinbase moderated its stock market advance and closed the first session with a price of $328. The capitalization of the value amounted to 65,000 million dollars before going public. Now, it exceeds $100,000 million.