European Markets Take a Breath After the Second Wave of Coronavirus Wipeouts

European Markets Take a Breath After the Second Wave of Coronavirus Wipeouts

On Tuesday, Europe’s financial market picked back up, which happened after the rise in newly infected cases with the coronavirus sparked the second wave, which was the area’s largest wipeout since June. This drove speculators back to government bonds. The surrounding circumstances were still rough since China and South Korea’s stock markets had pulled Asia down for a second day after the tech-giant Nasdaq dropped out of its ongoing stellar range. Traders were happy that the European markets were starting to be stable after months of turmoil. On Monday, STOXX 600, the pan-European index made 0.5% back from what it lost, helped by a corresponding 0.6%, and 1.5% benefits for the health sectors and tech. From Monday’s drop, the travel and tourism stocks saw a 0.3% fall, despite that, financial specialists remained close to security, yields on Germany’s administrative bonds held almost six-week lows in the wake of the dollar rising.

On Tuesday, Boris Johnson, the UK Prime Minister will persuade Britons to return to remote working, and also with new controls on bars, pubs, and restaurants. This was as a result of France experiencing a rise in the case count per day and had reached 10,000 people per day for the first time over the weekend. In Italy testing has become more mandatory and Germans are worried about the situation. Besides the effects of the pandemic, the shares of Standard Chartered and Hong Kong’s HSBC and Standard Chartered fell 2% further after report leaks indicated that they were among worldwide lenders with more than $2 trillion suspicious funds transferred over almost twenty years.

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Elwin de Groot, who is the director of Rabobank Macro Strategy said that the market might be taking a load off. He however said that he would be shocked if that was the end, alluding to Monday’s drawbacks that came as countries had been compelled to once again introduce part of the coronavirus restrictions which had been eliminated during summertime. He also said that the market won’t care for it. Investors didn’t expect the second wave of the pandemic to hit the markets as hard as the first wave. However, the final quarter will be another quarter with strict restrictions and there will be more, and more financial casualties. These same concerns are being felt in the financial markets, with both the GBP and EUR down about 0.3% against the dollar.

According to, a second wave will definitely affect the financial adversely, consequently leading to a worldwide recession which is already looming.

James Rosenberg, an EL&C Baillieu counselor in Sydney said that the business sectors around the world have run hard on the weight of massive liquidity, thus, the pullback in certain valuations doesn’t come as a surprise. so it’s to be expected to see a pullback in certain valuations. And also the second wave of the coronavirus pandemic in Europe or the uncertainty of the US presidential elections.

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In the past three weeks, US stocks have plummeted as speculators dropped heavyweight tech shares following a staggering rebound that lifted the Nasdaq and the S&P 500 to new levels of high.

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On Monday, the Bank of New York Mellon and JPMorgan had fallen 4.0% and 3.1% respectively.

In the US, the delays of the second stimulus measure are also raising concerns, after Congress has stalled for quite a long time over the size and state of another COVID-19 bill, besides the $3 trillion previously enacted. Justice Ruth Bader, the head of the US Supreme Court’s death seemed to make it impossible to pass another bill for a stimulus check before the presidential elections of November 3, which sparked massive declines in the health sector.

After too much pressure from Australian energy stocks and miners, there was a 0.7% drop in the country’s S&P/ASX 200, and the Aussie dollar tumbled to a one-month low.

Early trading showed a quiet day for the Japanese markets as they were shut for a public holiday, while the Hang Seng index of Hong Kong shut down almost 1%.

Brent had a 0.4% gain in the oil markets to $41, while crude oil in the US also increased to 0.5% to $39.5 for each barrel. However, Gold fell against the rising dollar.


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