By David Randall
NEW YORK, Sept 30 (Reuters) - Global equity markets inched
higher and safe haven assets including the dollar gained
Wednesday as rising COVID-19 cases and a chaotic U.S.
presidential debate weighed on investor sentiment on the last
day of a turbulent quarter.
President Donald Trump and Democratic rival Joe Biden
battled over Trump's record on the coronavirus pandemic,
healthcare and the economy in a bad-tempered first debate
Tuesday evening marked by personal insults and Trump's repeated
interruptions. U.S. stock futures had nudged higher early during the debate
but then retreated as Trump cast doubt on whether he would
accept the election's outcome if he lost.
"The only point worth mentioning is that the debate may have
increased expectations for a contested election result," said
UBS chief economist Paul Donovan. "Given the importance of
international investors to U.S. markets, this may add volatility
around the election."
MSCI's gauge of stocks across the globe .MIWD00000PUS rose
0.26% following modest gains in Europe and mixed trading in
Asia.
In morning trading on Wall Street, the Dow Jones Industrial
Average .DJI rose 215.43 points, or 0.78%, to 27,668.09, the
S&P 500 .SPX gained 18.35 points, or 0.55%, to 3,353.82 and
the Nasdaq Composite .IXIC added 37.94 points, or 0.34%, to
11,123.19.
Markets globally, most of which are headed for their first
monthly retreats since March's coronavirus-triggered meltdown,
either deepened losses or pulled back from highs scaled after
data showed China's economic recovery remains on track.
MSCI's broadest index of world shares, which tracks nearly
50 countries .MIWD00000PUS , is on path for a 4% September
loss. Overall, it is on track to close out the quarter with a 7%
gain.
Oil LCOc1 is down just over 10% this month, while gold's
4.1% XAU= drop will make it its worst month since late 2016.
The U.S. dollar =USD crept higher and is set for its best
monthly gain since July 2019, while the yen rose 0.2% to 105.50
per dollar, its strongest daily rise in nearly two weeks. FRX/
As the U.S. election draws closer, investors are
increasingly expecting a bumpy final lap and are bracing for the
possibility that the result will be unclear on polling day.
Options trade points to a volatile November. Two-month
dollar/yen volatility JPY2MO= , a gauge of expected moves in
the yen, is elevated, and its premium over one-month volatility
JPY1MO= is near record levels.
Biden said in the closing stages of the debate he would
accept defeat if he lost at the ballot box and would not claim
victory prematurely.
Trump, who has refused to commit to a peaceful transfer of
power if he loses the election, repeated unfounded allegations
that mail-in voting would lead to fraud.
"I don't think we were expecting anything else from Trump,"
said Chris Weston, head of research at Melbourne brokerage
Pepperstone. "He continues to put that contested (result) risk
premium back into the market."
Benchmark 10-year notes US10YT=RR last fell 5/32 in price
to yield 0.6594%, from 0.645% late on Tuesday.
Elsewhere, oil prices dropped amid rising concerns about
fuel demand as the coronavirus pandemic worsens. O/R
U.S. crude CLc1 was unchanged at $39.29 per barrel and
Brent LCOc1 was at $40.48, down 1.34% on the day.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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