European stocks sink as pandemic hits business
European stock markets sank on Friday, erasing meagre gains for the week, as more companies flagged a hit to business from the coronavirus pandemic while oil prices extended their previous day’s gains on hopes of a global supply cut.
With virus-fighting lockdowns raising the risk of a prolonged global downturn, investors continued to seek the safety of the U.S. dollar and government bonds, pushing U.S. Treasury yields near their lowest in three weeks.
The pan-European STOXX 600 index was down 0.4% by 0749 GMT, taking MSCI’S All Country World Index down 0.3%. A number of firms flagged a hit to business from the pandemic, foreshadowing a deeper earnings recession ahead of the reporting season.
MSCI’s Asia-Pacific index outside Japan dipped 0.6% while Japan’s Nikkei erased earlier gains to end flat. U.S. stock futures sank nearly 1 percent.
Brent crude futures gained 3.64% to $31.03, extending Thursday’s record 24.7% surge , while U.S. West Texas Intermediate crude fell 0.83% to $25.11. Trump said on Thursday he had spoken to Saudi Crown Prince Mohammed bin Salman, and expects Riyadh and Moscow to cut oil output by as much as 10 million to 15 million barrels, as the two countries signalled willingness to make a deal. Saudi Arabia said it would call an emergency meeting of the Organization of the Petroleum Exporting Countries, state media reported. The amount cited by Trump would represent an unprecedented cut equal to 10% to 15% of global supply, in output per day terms, a common unit of measurement. However, Trump provided few details, an omission some analysts said was likely intentional, and which they said explained a pullback in prices in the Asian session.
Gold prices extended the previous day’s gains on the dire U.S. jobless claims figures, intensifying fears of the coming economic slowdown and driving investors toward the safe-haven metal. Spot gold rose 0.1% to $1,613.78 per ounce after a 1.28% rise on Thursday.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.