Global stocks fall on COVID-19, market concerns


 Johnson Okafor

Stocks fell and the dollar rose on Wednesday as investors turned more cautious about COVID-19 and stretched stock valuations, with the U.S Federal Reserve meeting and a glut of corporate earnings also in focus.

Investors parsed through earnings reports from companies including Boeing and Microsoft, ahead of the Federal Reserve’s policy statement later in the day.

According to Reuters News, the Dow Jones Industrial Average fell 547.59 points, or 1.77 per cent, to 30,389.45, the S&P 500 lost 74.03 points, or 1.92 per cent, to 3,775.59 and the Nasdaq Composite dropped 275.52 points, or 2.02 per cent to 13,350.55.

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“There is plenty of discussion on COVID-19 variants, lockdowns, earnings, and co-ordinated retail assaults on single names to more than dampen risk appetite,” said Stephen Innes, chief global markets strategist at Axi.

Boeing Co posted a record annual loss but shares in Microsoft hit a record high after it said its Azure cloud computing services grew by 50 per cent.

MSCI’s gauge of stocks across the globe shed 1.85 per cent.

Following a weak Asian session in which shares were hurt by profit-taking, European indexes also retreated, with the STOXX 600 down 0.8 per cent.

London’s FTSE 100 was down 1.5 per cent while Germany’s DAX was down 2.4 per cent.

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The dollar index rose 0.744 per cent, with the euro down 0.79 per cent to $1.2064.

“There’s been a bit of a shift of tone in markets in the last few days,” said Catherine Doyle, investment specialist at Newton Investment Management.

“Markets are starting to worry about COVID again,” she added, highlighting in particular the Brazilian and South African variants of the virus.

Quarterly earnings from U.S. tech giants including Facebook and Apple are due later in the session.

“With some financial assets currently trading at what many are describing as bubble territory, there’ll be heightened attention on these releases to see whether these current valuations are justified,” Deutsche Bank strategist Jim Reid said in a note to clients.

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Heightened participation of retail investors in the stock market has come into focus this week, as amateur traders on Reddit’s WallStreetBets stock trading discussion group piled into GameStop, causing it to skyrocket while professional shortsellers scrambled to cover losing bets.

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