US Market tumbles on virus, trade tensions

The US stock market finished session lower on Wednesday, 24 June 2020, as investor sentiment was dampened by reports showing the increase in number of newly confirmed coronavirus cases and as the US signalled possible new tariffs on European goods.

At closing bell, the Dow Jones Industrial Average shed 710.16 points, or 2.7%, to 25,445.94. The S&P 500 index lost 80.93 points, or 2.58%, to 3,050.33. The tech-heavy Nasdaq Composite Index dropped 222.20 points, or 2.19%, to 9,909.17.

The U.S. Trade Representative said it was weighing new tariffs on US$3.1 billion (RM13.2 billion) in European goods amid a dispute over subsidies to planemaker Airbus, ratcheting up a fresh trade war tensions with the European Union. The Trump administration also has been threatening to reimposing tariffs on imports of aluminum from Canada on July 1 as the new USMCA, or the United States Mexico Canada Agreement, which replaced the North American Free Trade Agreement, is set to take effect.

 

Meanwhile, public health officials are growing increasingly worried about higher coronavirus counts in many states in the southern and western United States. New York, New Jersey and Connecticut announced 14-day quarantines on Wednesday on visitors from states with high COVID-19 infection rates. The travel advisory, which impacts residents of nine states, raises concerns about the pace of business activity resuming after lockdowns imposed to contain the spread of the pandemic.

In Texas, which had been among the most aggressive states in reopening, Governor Greg Abbott told a television interview that the safest place was home unless people had to go out.

Furthermore, the International Monetary Fund cut its economic forecast for 2020, saying that the coronavirus pandemic has caused an unprecedented decline in global activity. The IMF dropped its global economic growth expectations for this year to negative 4.9%. That's almost two percentage points lower than three months ago. In 2021, global growth is expected to rebound to a 5.4% growth rate, still leaving the level of GDP about 6.5 percentage points lower than the pre-COVID-19 projections in January.

Among Indian ADR, Dr Reddys Labs fell 2.25% to $53.12, Vedanta fell 1.38% to $5.72, WNS Holdings declined 2.7% to $54.48, Tata Motors shed 2.61% to $6.71, HDFC Bank sank 2.91% to $44.11, ICICI Bank shed 7.1% to $9.16, INFOSYS fell 3.72% to $9.07, and Wipro lost 1.54% to $3.19.

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