Global stocks pause after coronavirus shakeout

Global stock markets stabilised on Tuesday after a wave of early selling petered out and Wall Street futures managed a solid bounce after the previous day’s sharp selloff on fears about the spreading coronavirus.

European shares recorded their worst one-day loss since June 2016 on Monday as worries about the spread of the new virus far beyond China whacked global markets and risk sentiment.

But the pan-European STOXX 600 index rose 0.6% in early trade in London [.EU], with Italian shares, which tumbled 5.4% on Monday, also 0.6% higher. Italy is grappling with the worst outbreak of coronavirus in Europe.

In Asia earlier, South Korea’s hard-hit market eked out a 0.6% rise and helped MSCI’s broadest index of Asia-Pacific shares outside Japan fight back to flat.

Japan’s Nikkei was down 3.4%, catching up with the global sell-off after having been shut on Monday, while Shanghai blue chips eased 1.6%.

The rush to bonds left yields on 10-year U.S. Treasury notes at 1.39%, down almost 20 basis points in just three sessions and paying less than overnight rates. Yields are rapidly approaching the all-time low of 1.321% hit in July 2016.

In currencies, the euro edged up a little from recent three-year lows to reach $1.0862, while the dollar lost 0.06% to trade at 110.64 yen, away from a 10-month top of 112.21.

Against a basket of currencies, the greenback dipped 0.16% to 99.202.

Gold ran into profit-taking after hitting a seven-year peak overnight, and was last down 0.9% at $1,645.57 an ounce.

Oil steadied after shedding nearly 4% on Monday. U.S. crude was up 0.2% at $51.55, while Brent crude firmed 0.4% to $56.51.


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