Global shares slide as rising virus cases haunt reopenings

Jun 11, 2020

Global shares are tumbling as reports of rising numbers of coronavirus infections in many countries raise fears over risks of a resurgence in outbreaks

TOKYO (AP) — Global shares tumbled Thursday as reports of rising numbers of coronavirus infections in many countries raised fears over risks from reopenings from pandemic shutdowns.

France's CAC 40 plunged nearly 3.0% in early trading to 4,904.55. Germany's DAX dropped 2.7% to 12,190.45. Britain's FTSE 100 fell 2.5% to 6,172.19. U.S. shares were set for declines, with the future contract for the Dow industrials down 2.2% to 26,369.00. The S&P 500 future sagged 1.8% to 3,129.62.

Markets had been expected to track Wall Street's decline overnight after the Federal Reserve signaled a long path to recovery from the devastation of the coronavirus pandemic.

In the U.S., Texas and Florida were among the states reporting jumps in the number of coronavirus cases after precautions were relaxed last month. The total number of U.S. cases has surpassed 2 million.

Globally, India reported a record number of nearly 10,000 new coronavirus cases over the past 24 hours with health services in the worst-hit cities of Mumbai, New Delhi and Chennai becoming swamped by the rising infections.

In South Korea, the latest 45 new cases came in a weekslong resurgence that health authorities said they fear might develop into a massive wave.

Such developments have raised alarm, said Stephen Innes of AxiCorp.

“After all, a secondary outbreak is nothing to sneeze at as traders remain in a state of risk limbo watching risk assets for signs of continuation or stall," Innes said in a commentary.

Japan’s benchmark Nikkei 225 sank 2.8% to 22,472.91, while Australia’s S&P/ASX 200 skidded 3.1% to 5,960.60.

South Korea’s Kospi dropped 0.9% to 2,176.78 and Hong Kong’s Hang Seng slipped 2.3% to 24,480.15. The Shanghai Composite shed 0.8% to 2,920.90.

A slight rise in the value of the Japanese yen, which erodes the value of overseas earnings when they are brought home, hit exporters' shares.

Toyota Motor Corp.'s shares fell more than 2% while Fast Retailing’s dropped more than 4%.

The dollar was trading at 106.83 Japanese yen, down from 107.12 yen late Wednesday. The euro inched up to $1.1387 from $1.1377.

The outlook for a recovery from the worst downturn in decades is uncertain as states and countries push ahead with reopenings from pandemic shutdowns.

Brazil, Mexico, South Africa, India and Pakistan are among countries easing tight restrictions before their first outbreaks have peaked and before establishing detailed surveillance and testing systems to keep the virus under control.

Health experts have warned that could ultimately have devastating consequences.

The Federal Reserve emphasized Wednesday that the central bank will keep providing support to the economy by buying bonds to maintain low borrowing rates.

It forecast no rate hike through 2022, which could make it easier for consumers and businesses to borrow and spend enough to sustain an economy depressed by business shutdowns and high unemployment.

In other trading, benchmark U.S. crude oil dropped $1.50 to $38.10 a barrel. It rose 1.7% to settle at $39.60 a barrel on Wednesday. Brent crude, the international standard, fell $1.42 to $40.31 a barrel.