NEW YORK: US and European equities slid on Friday as investors sought direction after this week’s Federal Reserve meeting and a jump in coronavirus cases rattled sentiment, while gold rose and safe-haven buying lifted the Japanese yen.

The dollar was on track for its fifth straight day of declines against the yen as Japan’s monetary policy of yield curve control pushes up real interest rates.

US technology-related stocks reversed early gains on Wall Street to extend their decline to a third day. Apple Inc , Microsoft Corp, Inc and Alphabet Inc, which have led Wall Street to rally from the pandemic-induced slump in March, led equities lower.

A decision by the administration of President Donald Trump to ban WeChat and video-sharing app TikTok from US app stores starting Sunday night raised concerns about a new front in the ongoing China-US political tensions.

“The diplomatic tug of war is not being resolved,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management. “The tensions are heightening rather than easing. That’s not something the market likes to see.” The Japanese yen strengthened 0.29 per cent versus the greenback at 104.43 per dollar, after earlier gaining to 104.270 – its strongest level against the US currency since July 31.

The dollar index fell 0.052pc, with the euro up 0.08pc to $1.1856.

Worries about rising coronavirus cases and a patchy economic recovery subdued risk sentiment in equity markets.

France registered a record 10,593 new coronavirus cases on Thursday, the highest single-day count since the pandemic began, while talks of a second lockdown were making the rounds in Britain with hospital admissions doubling every eight days. MSCI’s benchmark for global equity markets fell 0.15pc to 569.29, while in Europe, the broad FTSEurofirst 300 index closed down 0.45pc.

Gold prices gained, buoyed by a weaker dollar and concerns over the economic recovery that were underscored on Thursday by the elevated weekly US jobless claims data.

Spot gold prices rose 0.51pc to $1,952.53 an ounce.

Published in Dawn, September 19th, 2020