European stocks, US futures stabilize after steep sell-off

Stock markets have recovered their poise, with European shares and Wall Street futures edging up after suffering steep losses the previous day

Stock markets recovered their poise on Tuesday, with European shares and Wall Street futures edging up after suffering steep losses the previous day.

Investors have been spooked in recent days by a resurgence in coronavirus cases that is leading to new restrictions on business in parts of Europe and other countries. And heightened tensions between the U.S. and China have taken the shine off technology stocks.

The future for the S&P 500 was unchanged while the contract for the Dow industrials was up 0.2%. Germany’s DAX rose 1% to 12,661 and the CAC 40 in Paris picked up 0.5% to 4,816. Britain’s FTSE edged 0.4% higher to 5,829.

“The COVID-19 noise is increasing in the U.K. and Europe as summer partying has left case numbers surging, threatening more widespread lockdowns yet again,” analyst Jeffrey Hally of Oanda said in a commentary.

He added that, “one of the dangers to the global recovery, would be the imposition again, of national level lock-downs in major developed economies. That risk appears to be rising, unfortunately.”

In Asian trading, investors caught up with a market drop in the U.S. the day before. Hong Kong’s benchmark Hang Seng lost 1% to 23,716.85 and the Kospi in South Korea sank 2.4% to 2,332.59. The S&P/ASX 200 in Australia gave up 0.7% to 5,784.10 and the Shanghai Composite index skidded 1.3% to 3,274.30.

Stocks of some big banks fell after a report alleged that several are profiting from illicit dealings with criminal networks. The report helped drive a massive sell-off across global markets on Monday and its impact was still reverberating Tuesday in Asia.

The report by the International Consortium of Investigative Journalists said leaked government documents show that the banks, including JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon, continued moving illicit funds even after being warned of potential criminal prosecutions. The documents were obtained by BuzzFeed News and shared with the ICIJ.

Hong Kong-traded shares in HSBC Holdings PLC skidded to their lowest level since 1995, closing 2.1% lower. Shares in its smaller rival, Standard Chartered PLC, dropped 2.3%.

Airlines shares also declined on concerns that a resurgence of travel restrictions related to the pandemic may further damage the travel sector.

Wall Street has been shaky this month, and the S&P 500 has dropped 8.4% since hitting a record Sept. 2 amid a long list of worries for investors.

The S&P 500 fell 1.2% on Monday to 3,281.06 for its fourth session of losses, the longest losing streak since stocks were selling off in February on recession worries.

U.S. investors appear worried that stocks have gotten too expensive at a time when coronavirus counts are still worsening, Congress is unable to deliver more aid for the economy, U.S.-China tensions are rising and a contentious U.S. election is approaching.

The likelihood that Congress may soon deliver more aid to the economy after extra weekly unemployment benefits and other stimulus expired has been diminishing.

In other trading U.S. benchmark crude oil picked up 30 cents to $39.61 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, climbed 33 cents to $41.77 per barrel.

The dollar slipped to 104.53 Japanese yen from 104.65 late Monday. The euro weakened to $1.1744 from $1.1769.