LONDON – Stock markets steadied Tuesday amid fears that a coronavirus resurgence will force fresh economically painful containment measures.
With the pandemic fuelling demand for computers and video game consoles as people rely on the internet to work, learn, and play more at home, Advanced Micro Devices finalised a deal to buy computer chip-making rival Xilinx for US$35 billion (RM145.76 billion).
Traders have meanwhile given up almost any hope for a new US stimulus package being passed before next Tuesday's election, with Democrats and Republicans blaming each other, though there are still expectations a new deal will be agreed afterwards.
European stock markets were steadier following hefty losses on Monday.
Around the half-way mark, London was flat, while Frankfurt dipped 0.1% and Paris lost 0.6%.
Asia's leading indices closed mixed.
On Wall Street, the Dow suffered its worst session Monday since early September, dropping more than 2% while the S&P 500 and Nasdaq also suffered sharp losses.
Oil prices recovered slightly Tuesday after steep falls Monday, while the dollar dropped versus its main rivals.
The need for a big-spending rescue for hard-hit Americans is being highlighted by a big jump in new infections across the country that observers fear will deal a blow to an already shaky economic recovery.
Data this week is expected to show record US growth in the third quarter thanks to a multi-trillion-dollar stimulus agreed earlier this year alongside huge Federal Reserve support.
However, that follows a record contraction in the second quarter, and economists have tipped the economy to shrink for the year overall.
"The second and third wave spread of Covid-19 is possibly triggering a point of no return for some industries as the economic damage borders on irreversible," said Axi strategist Stephen Innes.
"The Covid-19 induced downward spiral continues accelerating."
With an eye on next week's vote, he added: "We should expect price action to remain choppy in the days ahead, with investors very reluctant to put on any significant risk ahead of what promises to be a headline heavy week or two." – AFP, October 27, 2020
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