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GLOBAL MARKETS-Surge in coronavirus cases set to shake Asian markets

Credit: REUTERS/ISSEI KATO

Asian stocks were set to join a global sell-off on Thursday as worries about surging coronavirus cases in Europe and the United States sent investors scrambling for safe-haven assets.

By Pete Schroeder

Oct 29 (Reuters) - Asian stocks were set to join a global sell-off on Thursday as worries about surging coronavirus cases in Europe and the United States sent investors scrambling for safe-haven assets.

Australia's ASX 200 .AXJO fell 1.73% in early trade, while Hong Kong's Hang Seng index futures .HSI, .HSIc1 were off 0.8%.

Japan's Nikkei 225 futures NKc1 were up 0.24% but down 1.23% from the underlying index's .N225 close on Wednesday.

MSCI's gauge of stocks across the globe .MIWD00000PUS was down 2.89%.

Surging coronavirus cases in the United States and Europe were a growing concern as French and German leaders announced new lockdown measures to combat rising infections. Worsening matters for investor enthusiasm were dwindling hopes for any imminent U.S. economic relief package with a presidential election less than a week away.

"Risk sentiment took a nose dive on Wednesday amid more concern around the spread of COVID-19 and renewed restrictions in Europe," ANZ analysts wrote in a note. "This was seen alongside ongoing concerns about failure to agree on U.S. fiscal aid before the election next week, adding to a weak economic picture."

U.S. and European stocks faced a brutal trading day on Wednesday with major Wall Street indices down 3% and the Dow at its lowest levels since late July. Energy and technology stocks led the declines.

The Dow Jones Industrial Average .DJI fell 3.43%, the S&P 500 .SPX lost 3.53%, and the Nasdaq Composite .IXIC dropped 3.73%.

Wall Street's "fear gauge" is on pace for its biggest weekly jump since March, when the pandemic took off in the United States. The Cboe Volatility Index .VIX surged on Wednesday to its highest level since June, ending at 40.28.

Looming large ahead is Thursday's advance report on U.S. third-quarter economic growth, with analysts expecting record growth but not enough to make up for the hit from the pandemic.

A closely watched estimate model used by the Atlanta Federal Reserve shows third-quarter growth at a 37% annualized pace, which would only account for about 71% of the $2.2 trillion in lost output so far in 2020.

Oil also took a big hit Thursday, falling over 5% to a four-month low as coronavirus concerns weighed on demand expectations. Brent LCOc1 futures fell $2.08, or 5.1%, to settle at $39.12 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 fell $2.18, or 5.5%, to $37.39.

Investors seeking a safe-haven moved into the greenback with the dollar index =USD rising 0.3% against a basket of six currencies.

The flow to the dollars weighed on gold with the yellow metal XAU= settling down 1.56% at $1,877.06 per ounce, after falling as much as 2% on Wednesday.

Benchmark 10-year notes US10YT=RR last rose 1/32 in price to yield 0.7743%.

Global assetshttp://tmsnrt.rs/2jvdmXl

Global currencies vs. dollar http://tmsnrt.rs/2egbfVh

Emerging marketshttp://tmsnrt.rs/2ihRugV

MSCI All Country Wolrd Index Market Caphttp://tmsnrt.rs/2EmTD6j

(Reporting by Pete Schroeder; Editing by Sam Holmes)

((Pete.Schroeder@thomsonreuters.com; 202-310-5485;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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