Shares struggle as coronavirus overshadows China data
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[October 13, 2020]
By Tom Wilson
LONDON (Reuters) - European shares
struggled on Tuesday as worries over the coronavirus pandemic
overshadowed Chinese trade data that pointed to a buoyant recovery,
while the U.S. dollar edged away from a three-week low.
The Euro STOXX 600 <.STOXX> fell 0.4% before trimming losses, with
markets in Frankfurt <.GDAXI>, London <.FTSE> and Paris <.FCHI>
mirroring its moves. It was last down 0.2%, on course to end three
straight days of gains.
Keeping markets on edge, traders said, was news that Johnson & Johnson <JNJ.N>
was pausing its COVID-19 vaccine candidate clinical trials because of an
unexplained illness in a study participant.
Investors see the quick introduction of a vaccine as key to helping
economies recover. J&J's move comes after AstraZeneca <AZN.L> paused
late-stage trials of its experimental vaccine in September, also due to
a participant's unexplained illness.
The travel and leisure <.SXTP> and autos <.SXAP> sectors suffered,
losing 1% and 0.3% respectively after heavier falls in early trading.
![](http://archives.lincolndailynews.com/2020/Oct/13/images/ads/current/chicagost_sda_FFARM_2018.png)
Wall Street was also set to lose ground. S&P 500 futures recovered most
of their earlier losses to trade down 0.1%.
The risk-off mood contrasted with earlier resilience for Asian markets.
They recovered losses after Chinese data showed exports rising 9.9% in
September and imports swinging to a 13.2% gain versus a 2.1% drop in
August.
The data, which suggests Chinese exporters are recovering from the
pandemic's damage to overseas orders, helped MSCI's broadest index of
Asia-Pacific shares outside Japan gain 0.2%.
Chinese blue-chip shares <.CSI300> added 0.3% after dipping early in the
day. Some investors, though, raised questions about how strong consumer
demand would prove to be.
"The question is not necessarily how China's trade is doing per se, but
how well will consumers spend on Christmas to give some sense of
normalcy amid a period of great stress," said Nordea Investments'
Sebastien Galy in a note.
Currency traders were also watching Chinese trade-related issues.
Reports that Beijing has stopped taking shipments of Australian coal
caused the Australian dollar to drop as much as 0.6% to $0.7165 <AUD=D4>.
The MSCI world equity index, which tracks shares in nearly 50 countries,
fell 0.1%.
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![](../images/101320pics/news_n27.jpg)
A worker shelters from the rain as he passes the London Stock
Exchange in the City of London at lunchtime October 1, 2008.
REUTERS/Toby Melville/File Photo
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Government bond yields in the euro zone held near recent troughs,
with hefty supply failing to dent a market bolstered by expectations
for further central bank easing.
Germany's 10-year Bund yield touched -0.538% <DE10YT=RR>, its lowest
in just over a week. Italian <IT10YT=RR> and Greek <GR10YT=RR>
benchmark 10-year debt both hit record lows.
STIMULUS HOPES
Investors increasingly expect Democratic candidate Joe Biden will
win the U.S. presidential election next month. That would probably
lead to a big stimulus package to help the coronavirus-battered U.S.
economy.
"Biden effectively leading in the polls is removing some element of
uncertainty," said Jeremy Gatto, an investment manager at Unigestion
in Geneva. "In investors' minds, it's not a question of if we get a
stimulus, but when."
Some expect a Biden win to undermine the U.S. dollar, since he's
pledged to raise corporate tax rates. But the dollar rose 0.2%
against a basket of other currencies to 93.214 <=USD>, trying to
extend a rebound from Friday's near-three-week low of 92.997.
![](http://archives.lincolndailynews.com/2020/Oct/13/images/ads/current/statebank_lda_2020_PPP.png)
The Chinese yuan fell 0.1% to 6.7466 per dollar <CNH=>, after the
central bank set a weaker-than-forecast midpoint, offsetting any
boost from the trade data.
For Reuters Live Markets blog on European and UK stock markets,
please click on: [LIVE/]
(Reporting by Tom Wilson; editing by Kirsten Donovan, Larry King)
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