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Rising infection numbers drag global stocks lower

Stocks tumbled in the US and Europe as rising coronavirus infections and tougher lockdowns added to worries about the economic hit from the pandemic.

The S&P 500 Index fell more than 2.5pc, headed for the biggest drop in seven weeks, amid a surge in Covid-19 hospitalisations, especially in the Midwest.

Energy shares sank with oil prices, and technology stocks were also among the worst performers. The VIX Index, a measure of expected US equity volatility, climbed to the highest level since June.

Boeing slumped to a one-month low as it announced plans for more job cuts. Microsoft was among the biggest drags on the S&P500 as investors focused on a forecast that fell short of analysts’ highest projections, looking past a decisively upbeat profit and sales report. General Electric gained after reporting a surprise profit.

The Stoxx Europe 600 Index fell to a five-month low, losing more than 3pc at one point after German Chancellor Angela Merkel reached a deal for a one-month partial lockdown to curb the spread of the virus. Auto and real-estate shares saw the steepest declines.

Markets in the US and Europe have retreated sharply this week as virus cases surge and American lawmakers fail to agree on an economic aid package before the November 3 election. Analysts are also warning about increased volatility in markets ahead of the presidential vote and in its aftermath, with some saying that a contested outcome is still a possibility.

“As you see cases rise and reduced activity across the country, that directly translates into an impact on GDP growth,” said Phil Toews, chief executive officer of asset manager Toews Corp. “The lack of a fiscal stimulus means people who were unemployed who were able to continue to purchase things are no longer going to be able to do that.”

Elsewhere, oil fell sharply on concern lockdowns will sap demand. Bitcoin headed to its biggest drop in almost two months after reaching the highest since January 2018.

In Asia, stocks fared better. The MSCI Asia Pacific Index edged lower on Wednesday, and markets in South Korea and Shanghai posted modest gains. In China, indicators tracked by Bloomberg showed the recovery continued to display mixed signals while remaining broadly steady in Oc

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