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Oil slips on COVID-19 worries

Monitoring Desk

Asian stocks rose on Thursday, extending a rebound in global markets following a sharp selloff earlier this week, while oil prices eased again on worries about rising COVID-19 cases in some parts of the world.

Japan led gains, with the Nikkei 225 (.N225) rallying 1.7%, after sliding 2% in each of the last two sessions.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.4%, following a 0.9% decline the previous day. Chinese blue chips (.CSI300) rose 0.3%.

“Overall I think markets are still skewed to taking on risk, and I don’t think we’ve seen the final record high by any means in the U.S. stock market or in global equities,” said Kyle Rodda, a market analyst at IG in Melbourne.

“At the end of the day, (the selloff earlier this week) was just markets whipping around as the froth has blown off risk assets.”

MSCI’s gauge of stocks across the globe (.MIWD00000PUS) added 0.2% on Thursday, following a 0.4% gain overnight.

On Tuesday, the index had slumped 0.8%, the most in four weeks, as market sentiment soured amid concerns that record coronavirus infections in India, likely restrictions in Japan and rising cases in Latin America will hamper the global economic recovery.

On Wall Street, the S&P 500 (.SPX) rose 0.9%, reversing two days of declines, to finish Wednesday’s session just 12 points below its record close.

“‘Buy the dip’ mentality appears to be back in equities,” Tapas Strickland, an analyst at National Australia Bank, wrote in a client note.

Oil prices slipped for a third day on concerns that surging COVID-19 cases in India will drive down fuel demand in the world’s third-biggest oil importer, while a surprise build in U.S. stockpiles added to the negative tone.

U.S. crude fell 10 cents on Thursday to $61.25 per barrel and Brent was down 10 cents to $65.22.

Spot gold edged higher to $1,794.32 an ounce.

U.S. Treasury yields stayed depressed, with the yield on benchmark 10-year notes down 2 basis points at 1.5414% on Thursday, languishing near the lowest since March 12.

In currency markets, the dollar remained pinned near multi-week lows against major peers as U.S. yields stayed subdued.

The dollar stood at 108.04 yen , close to a seven-week low, while the euro was quoted at $1.2037, not far from its strongest since March 3.

The European Central Bank decides policy later on Thursday, with no change expected.

Courtesy: Reuters