European markets breathe easier
Europe's stock markets clawed back some ground on Tuesday, a day after rising second waves of the coronavirus epidemic caused the region's biggest wipeout since June and drover investors back to government bonds. Conditions were still choppy. South Korea and China's bourses had pulled Asia down for a second day after the tech-heavy Nasdaq fell out of its recent stellar range, so it was a relief for traders to see Europe stabilise.
The pan-European STOXX 600 index made back 0.5% of the 3.2% it lost on Monday, helped by respective 1.5% and 0.6% gains for the tech and healthcare sectors. Travel and leisure stocks saw 0.3% falls to add to Monday's 5.2% plunge, however, and as investors stayed close to safety, yields on
Germany's government bonds held near sixweek lows and the dollar rose.
"The market may be taking a breather but I would be surprised if that was it," said Rabobank's Head of Macro Strategy Elwin de Groot, referring to Monday's rout that came as countries had been forced to reintroduce some of the COVID-19 restrictions they removed over the summer.
"The market won't like it. The base case was that the second wave wouldn't be as bad as the first... but the fourth quarter will be now another quarter with stringent restrictions and there are going to be an increasing number of economic victims," he said.
Concerns surfaced in the currency market, with both the euro and Britain's pound down around 0.3% against the dollar. UK Prime Minister Boris Johnson will encourage Britons on Tuesday to go back to working from home, along with new curbs on pubs, bars and restaurants.
This came as France saw its seven-day daily rolling case count rise above 10,000 for the first time over the weekend, Italy introduced more mandatory testing and Germany describe the situation as "worrying".
Beyond the impact of the virus, Hong Kong shares of HSBC and Standard Chartered weakened a further 2%, after leaked reports showed they were among global lenders that have transferred more than $2 trillion in suspect funds over nearly two decades. "Markets globally have run hard on the weight of huge liquidity, so it's not surprising to see a pullback in some valuations," said James Rosenberg, an EL&C Baillieu advisor in Sydney.
"Add in uncertainty with U.S. elections and another COVID wave in Europe ... it unsettles investors." Australia's S&P/ASX 200 had dropped 0.7%, pressured by miners and energy stocks and the Aussie dollar fell to a one-month low while Hong Kong's Hang Seng index had closed down nearly 1%.
Japanese markets were closed for a public holiday but early trading indicated a subdued day in store for Wall Street, with S&P 500 futures down 0.18% and Nasdaq 100 futures flat%.U.S. stocks have tumbled over the past three weeks as investors dumped heavyweight technology-related shares following a stunning rally that lifted the S&P 500 and the Nasdaq to new highs.
JPMorgan and Bank of New York Mellon had fallen 3.1% and 4.0% respectively on Monday too. Concerns are also growing about a delay in U.S. stimulus measures after Congress has remained deadlocked for weeks over the size and shape of another coronavirusresponse bill, on top of the roughly $3 trillion already enacted into law.
Software development company Bentley Systems Inc on Tuesday revised its targeted price range for its upcoming initial public offering, which could value the company at about $5.49 billion. The company plans to sell 10.75 million shares in the IPO at a target range of $19 to $21 per share, according to a filing bit.ly/32PCRYQ. It had earlier expected it to be priced between $17 and $19 per share.
Bentley expects to raise up to $225.7 million from the IPO. A host of companies have filed for U.S. initial public offerings this year during one of the busiest IPO periods in recent history, as businesses rush to take advantage of ample investor appetite for new stocks. Bentley, which was founded in 1984, develops, manufactures and sells software solutions for infrastructure operations. Goldman Sachs & Co, BofA Securities and RBC Capital Markets are among the underwriters for the IPO.