Markets Sink Into Red Despite Vaccine, Sunak Headlines

Markets Sink Into Red Despite Vaccine, Sunak Headlines

Spreadex  | Oct 23, 2020 06:09

After erasing their losses at lunchtime, the markets couldn’t help but slip back into the red, despite a couple of positive headlines.

The midday rebound seemed related to good news out of the Oxford vaccine trials, with reports that it was prompting a ‘strong immune response’ in patients.

Then there was Rishi Sunak’s announcement that the government is extending the furlough replacement scheme, by launching a new grant scheme for companies in areas under tier 2 restrictions while making changes to the level of employer contributions and number of hours an employee must work for a firm to be eligible.

Yet this had only a limited impact on investors’ disposition. The markets remain deeply worried by the scope and scale of rising covid-19 cases and subsequent restriction measures around the world, but especially in Europe.

The FTSE fared best out of the European indices, dipping just 0.2% as it lifted away from the morning’s 5-month lows. But that’s in large part due to the pound unwinding some of yesterday’s super-surge; sterling was down 0.6% against the dollar and 0.3% against the euro.

Elsewhere the DAX dropped 0.6%, pushing the German bourse below 12,500, while the CAC shed half a percent.

The Dow Jones wasn’t immune to the day’s losses, falling 130 points as it sporadically slipped under 28,100. The index might be feeling a bit nervous ahead of tonight’s second, and final, presidential debate between Trump and Biden, as well as the mixed signals regarding the progress of a fresh covid-19 stimulus package.

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