Equity markets mixed as virus, vaccine worries simmer

HONG KONG (AFP) – Stocks were mixed yesterday as virus concerns returned to the fore with several countries reimposing lockdown measures to fight a surge in new infections and the halting of two trials denting hopes for a vaccine or treatment being developed anytime soon.

Analysts said investors had also by now priced in any expectations for Democratic sweep of the White House and Congress in next month’s elections that many expect will see a ramped-up new stimulus for the beleaguered United States (US) economy. Fears for the economic recovery have mounted in recent weeks because of a COVID-19 resurgence, particularly in Europe where governments are resorting to new controls while trying to avoid the devastating nationwide lockdowns of March and April.

But Netherlands went into “partial lockdown” yesterday, with all cafes and restaurants closing for at least two weeks, while France is expected to announce tighter restrictions and faster testing that some media speculated could see evening curfews in Paris.

And in Britain, Prime Minister Boris Johnson, whose country has the highest death toll in Europe, on Monday ordered closures in Liverpool as part of a new strategy, while others face fresh containment measures.

The moves come as pharmaceuticals giant Johnson & Johnson said it had temporarily halted its vaccine trial after a participant fell sick, which was followed by news that Eli Lilly had also paused testing of an antibody treatment out of safety concerns.

Traders watch a televised speech by US President Donald Trump at the New York Stock Exchange in New York. PHOTO: AP

“Anxiety over second-wave resurgence of Covid-19, which is now apparent in many major economies, is… clouding the view where the question remains how activity curtailment measures feed through into economic and mobility activity,” said Axi strategist Stephen Innes. And on that front, risk has also deteriorated as participants mulled the implications of another vaccine trial setback.”

OANDA’s Jeffrey Halley added: “The emphasis is on temporary… and trials will more than likely resume quickly. It does, however, highlight the realities of vaccine development, even in accelerated Covid-19 environment.”

All three main indexes on Wall Street fell and Asia also struggled.

Shanghai dropped 0.6 per cent, with little reaction to a speech by Xi Jinping in which he reaffirmed a commitment to open up the Chinese economy.

Sydney, Seoul, Taipei and Manila all turned negative. Singapore shed 0.7 per cent after data showed the city-state’s economy contracted seven per cent in the third quarter.

Still, Hong Kong, Tokyo, Manila, Wellington and Jakarta edged up.

London and Frankfurt edged up in early trade but Paris dipped.