The US and Asian stock markets underwent negative dynamics on Friday. The reasons for the decline are still due to the continuous growth of the COVID-19 cases in the Americas and the other parts of the world, as well as concerns about a relatively slower than previously expected economic recovery.
The first factor has been tormenting the markets for the third week in a row while investors, on the other hand, continue to ignore it. However, with the present condition, investors would have to think twice. The threat of the second wave and its negative consequences is starting to grow a possibility, which means that the appetites of market participants are reduced. Traders are even more worried about the serious consequences of the second wave, which can lead to greater losses than previously expected.
Japan's Nikkei 225 index fell by 0.7%. Mitsui Fudosan Co. had a greater loss with 5.1% followed by car manufacturers Suzuki Motor Corp. with 3.8%, Honda Motor Co. by 2.8%, and Mitsubishi Motors Corp. by 3.7%, respectively.
The China Shanghai Composite Index also fell by 1.4%. The Hong Kong index sank even further, which fell 2.2%. The shares of China Life Insurance Co were the most affected falling 6.5% of the value.
The South Korean Kospi Index fell 1.2%. Corporate losses here are not so big, but still a negative. Samsung fell 0.8% while Sharp Corp. by 2%.
Australia's S & P / ASX 200 index declined 0.9%. At the same time, the value of shares of the largest mining companies BHP and Rio Tinto went down. The former lost 1%, and the latter by 1.1%.
The situation in world stock markets has been extremely mixed lately. They were able to bring back the bulk of the losses that occurred against the background of the first wave of coronavirus infection in the world. The only problem is that the rally in the markets was so rapid and sharp that now, perhaps, a significant negative correction is being observed, which will return everything to its previous level. The situation is heating up due to extreme tension and uncertainty.
Market participants are gravely concerned that the number of COVID-19 cases in the world are growing rapidly daily. In view of this, investors are trying to make their work as safe as possible, so those sectors that have won the confidence of investors come to the fore. It includes, in particular, the technology sector which should provide the most support to the main stock indicators.
However, the spread of coronavirus infection is growing rapidly and it seems that we can no longer talk about a more accelerated restoration of economic growth. On Wednesday, there was a record increase in the number of cases in some US states. Moreover, more and more new cases are recorded daily in Latin America, as well as in Asia and Europe.
US stock indices are changing in different directions. The S&P 500 and Dow corrected downward, while Nasdaq continues to break positive records. The reason for the negative here was the increasingly obvious introduction of quarantine restrictive measures related to the containment of coronavirus infection. On Wednesday alone, a record breaking increase of 60,000 COVID-19 patients was recorded. And this is a negative record.
Market participants began to pay close attention to statistics coming from the largest companies in the hope of finding a point of support and growth in it. However, there is not too much positive. Thus, according to preliminary forecasts, the S&P 500 should face a decrease in the level of profit by about 40%. If this happens, it will be the most serious decline in the last twelve years.
Most analysts have already begun to reject the theory of a quick V-shaped economic recovery, which was previously anticipated.
Meanwhile, all the negativity did not stop the Nasdaq index from taking on the lead again. This was the fifth record growth over the past six days. The index receives the main wave of positive from shares of Amazon.com, Microsoft Corp., Nvidia, and Apple Inc. which all underwent growth.
The Dow Jones Industrial Average index lost 1.39% on Thursday and dropped to 25 706.09 points. The S&P 500 index followed a negative trend and fell 0.56%, which sent it to a new mark of 3,152.05 points. The Nasdaq Composite Index went against the current trend and showed steady growth of 0.53%, which moved it to another record level of 10,547.75 points.
