LONDON / SINGAPORE - Global stocks slipped on Tuesday, oil sagged and a safety bid supported the dollar as simmering Sino-US tensions and new coronavirus restrictions in California kept a lid on investor optimism with earnings season getting underway.

Wall Street opened lower on Tuesday following a mixed bag of quarterly earnings from US lenders and simmering tensions between Washington and Beijing, while new coronavirus restrictions in California hit tech stocks for a second straight day.

The Dow Jones Industrial Average fell 41.63 points, or 0.16%, at the open to 26,044.17. The S&P 500 opened lower by 14.11 points, or 0.45%, at 3,141.11, while the Nasdaq Composite dropped 80.59 points, or 0.78%, to 10,310.25 at the opening bell. 

MSCI’s All-Country World Index edged down 0.4 percent, after touching a 20-week high on Monday. The pan-European STOXX 600 opened 1.5 percent lower and was heading for its worst day in 14 sessions after technology stocks dropped 3.4 percent. This followed a slump a day earlier in the tech-heavy Nasdaq.

One of the gainers was German meal-kit delivery firm Hellofresh, which added 4.3 percent as it raised its full-year revenue forecast.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.9 percent. The Chinese mainland stocks were down despite better-than-expected trade numbers. The US dollar firmed marginally.

The moves followed a selloff on Wall Street after California Governor Gavin Newsom ordered bars closed and restaurants and movie theatres to cease indoor operations.

S&P 500 futures were 0.5 percent stronger after the index lost 0.9 percent on Monday.

The Shanghai index fell 0.7 percent despite official figures showing Chinese exports and imports topped forecasts in June, while China continued to buy significant amounts of commodities including iron ore.

The return of restrictions in California also has markets on edge about whether the coronavirus can wreak more economic harm. Global infections have surged by a million in five days, and top 13 million.

All about 2021

Oil prices, a proxy for global energy consumption and growth expectations, reflected the concerns. US crude futures fell 1.5 percent to US$39.52 per barrel and Brent futures fell 1.3 percent to US$42.16 per barrel. 

Investors sought out the safety of eurozone government bonds. Most yields were about 2-3 basis points lower, with Germany’s 10-year Bund yield, the region’s benchmark, dropping 2.5 bps to -0.43 percent.

There are also signs of an interruption to the steady flow of better-than-expected economic data. On Tuesday, data showed Singapore entered recession last month, with the economy contracting 41.2 percent for the quarter, worse than the 37.4 percent analysts had forecast.

Currency markets hemmed the dollar in a tight range. Against a basket of currencies, the dollar index was last up 0.1 percent at 96.662. The euro was down 0.1 percent against the dollar at US$1.1331.

Currencies exposed to global trade sentiment such as the Australian dollar and the China's offshore yuan were down.

Focus shifts later to US earnings, with JP Morgan, Citigroup, Wells Fargo and Delta Air Lines due to report on Tuesday to a market already looking ahead to 2021 and beyond.

“It’s really about 2021 — 2020 is over,” said fund manager Hugh Dive, chief investment officer at Atlas Funds Management in Sydney, where earnings season properly begins next month.

“The outlook statements are what the market will look at,” he said. “If a company surprises on the upside with their 2020 earnings, but has shaky commentary for 2021 .... they’re not going to be rewarded for that.”

Spot gold slipped 0.2 percent at US$1,798.79 per ounce as the dollar strengthened.