Energy stocks prop up EU shares after virus-led rout

European shares rose in choppy trading on Thursday, driven by a recovery in energy stocks on hopes of a truce in the Saudi-Russia oil price war, even as fears about the coronavirus pandemic lingered ahead of another expected surge in US jobless claims.

The pan-European STOXX 600 was up 0.3%, after starting the second quarter on a dour note as latest figures showed a collapse in euro zone factory activity in March, upending businesses and sparking mass staff furloughs. The energy sector jumped 4.4%, with

Royal Dutch Shell, Total SA and BP providing the biggest boosts to the STOXX 600, but gains were capped by a 1% decline for travel & leisure stocks, financial services and utilities.

“Sentiment remains exceptionally fragile as investors are a flat-out bundle of nerves fretting over the potential impact the coronavirus will have in the U.S. markets and the economy,” said Stephen Innes, chief global markets strategist at AxiCorp. “Economists continue to downgrade the macro forecast (and) for many market observers, all roads lead lower.”

Investor confidence has recently swung between headlines on corporate damage from the health crisis and an unprecedented round of stimulus measures to cushion its economic impact, with the STOXX 600 down more than 25% from its record high despite a rebound last week.

Initial U.S. jobless claims are now expected to have climbed to a seasonally adjusted 3.5 million for the week ended March 28, with some estimates ranging as high as 5.25 million, and U.S. President Donald Trump has flagged more economic pain ahead. World stocks treaded water on Thursday.