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Global markets stabilize after fear of coronavirus causes huge Wall Street sales

Large indices in Asia ended with losses. Japan’s Nikkei 225 (N225) ended the day with 0.8% after recovering from a much larger fall in early trading. Hong Kongs Hang Seng (HSI) decreased by 1% while China’s Shanghai Composite (SHCOMP) ended a little changed.
But the atmosphere was more positive in other regions. The FTSE 100 (UKX) opened with a modest win, while Germany’s DAX (DAX) and France CAC 40 (CAC40) about 0.5% was added. Dow (INDU) futures were last up more than 400 points, or 1
.6%. S&P 500 (SPX) futures gained 1.4% while Nasdaq (COMP) futures advanced 1.3%.

US stocks hammered on Thursday as fears of a rise in coronavirus cases and a dismal economic outlook from the US central bank forced investors to face risks that had been pushed aside during the huge market rally that has taken place since March.

US stocks fell during the final hours of trading on Thursday. The Dow (INDU) fell 6.9% and dropped below 26,000 points for the first time since its inception June. The S&P 500 (SPX) closed down 5.9%, closing in on its lowest total score since the end of May, while Nasdaq (NDX) closed 5.3% lower.

Kevin Giddis, head of fixed interest rates at Raymond James, said the sale was caused by the insight among many investors that the US economy is taking longer to recover from the pandemic than expected.

“Risk markets saw a huge upswing last week with the resumption of the US economy and a better-than-expected job report,” he said. “But the timing [of the recovery] may not be as optimistic as the markets first thought. “

Jeffrey Halley, senior market analyst for Asia Pacific in Oanda, said US markets are likely to continue to set the tone for global equities. “All eyes will be on the United States … and if the correction continues or is forgotten as quickly as it began,” he wrote in a research report. “A sensible case can be designed for either outcome and a wait-and-see strategy is the best.”

Oil markets were also lower on Friday after US crude prices crashed by 8% on Thursday – likely a response to fears of detection of infections in the world’s largest oil-consuming economy, according to Stephen Innes, head of global markets at AxiCorp. Any new shutdowns to contain the virus would lower energy requirements again.

US oil fell briefly more than 5% early in Asia, although futures recovered and traded most recently at 3.4% to $ 35.09 a barrel. Brent, the global benchmark, fell 3% to $ 37.40 a barrel, extending Thursday’s steep declines.

– Anneken Tappe and Tami Luhby contributed to this report.

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