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LONDON – News that Donald Trump and his wife, Melania Trump, tested positive for Covid-19 shook markets on Friday. European stock markets opened lower, but reacted after the initial shock with information on the health of the US president. The stock market maintained a downward trend in the United States.
Analysts say it is too early to assess whether and how the US president’s illness could change the presidential race, just weeks before the country’s elections. But they recognize that the diagnosis brings instability to the financial system.
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In London, the FTSE 100 index reacted and closed the session with a slight increase of 0.39%, although concerns about Brexit and a 22% drop in the Centamin miner limited the gains of the index more focused on the domestic market. At the beginning of the day, the main index of the British stock market registered a fall of 1%, reaching a loss of up to 1.2%, taking weekly gains to 1% after two weeks of losses.
In Paris, which registered a 2% drop at the opening, the stock market closed stable, with an increase of 0.02%. In Germany, the main stock market index, DAX, continued to decline, falling 0.33% at the close. Before the open, the European equity futures market fell 1%.
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In the US, markets are down, after two days of gains. At 12:25 pm (Brasilia time), the Dow Jones Index of the New York Stock Exchange fell 0.08%, while the S&P 500 lost 0.64%. The Nasdaq Technology Exchange fell 1.67%. In the futures market, the Dow Jones fell 1.6%. The S&P fell 1.7% and the Nasdaq depreciated 2.3%.
Trump announced on Twitter on Friday that he and first lady Melania tested positive for Covid-19 and were quarantined. The diagnosis came after news Thursday that Hope Hicks, one of the president’s closest aides, had the disease.
– It is still too early to say how much this (Trump’s illness) may affect the elections. Markets are selling on a chill reaction in the stomach, which is understandable, said Khoon Goh, head of analytics for Asia at ANZ in Singapore.
“What worries me the most is the question mark about the legitimacy of the electoral process,” David Arnaud, a fixed income fund manager at Canada Life Asset Management, said of Trump’s diagnosis.
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The news prompted investors to prepare for a period of high volatility, with most agreeing that markets will remain tense for the near future.
In Asia, the stock exchanges of China, Hong Kong and South Korea were closed for the holidays. In Japan, the capital square resumed operations after Thursday’s trading session was canceled due to a technical problem.
The Nikkei index fell 0.7%, with news of Trump’s illness and possible changes in the political framework in the US.
The chaotic clash between Trump and his Democratic rival Joe Biden earlier this week, during the first presidential debate, had already increased pressure on markets that were considered riskier.
Trump’s refusal to say he would acknowledge the November 3 election result in the face of defeat prompted a warning in the financial sector.
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