Stocks tumble after three-day winning streak on markets

STOCK markets have turned lower after a mixed day in Asia as investors weighed the prospect of a long period of contagion by coronavirus against economic stimulus efforts by world governments.

Indexes opened about 3% lower on Wall Street yesterday as the market gave back some of the gains of the past three days.

Germany’s Dax earlier fell 3.2% to 9,687, while the Cac 40 in Paris gave up 4% to 4,363. Britain’s FTSE 100 sank 4.6% to 5,551 81.51 after Prime Minister Boris Johnson was diagnosed positive for the virus.

“Rallies don’t last forever and clearly investors are happy to call time on this one as we head into another uncertain weekend,” Craig Erlam, of Oanda, said in a report.

“We may have had a good run this week but the weekend can feel like a long time at moments like this and the numbers we’re getting from the US are getting uglier by the day,” he said.

Thursday’s bad news on US unemployment was expected and followed earlier gains after Congress and the Federal Reserve promised an astonishing amount of aid for the economy and markets, hoping to support them as the outbreak causes more businesses to shut down by the day.

The $2.2 trillion relief plan due to be voted on by the House of Representatives yesterday includes direct payments to US households and aid to hard-hit industries.

The prospect of a big financial shot in the arm for businesses and households helped offset some of the concerns about the steep job losses the economy is beginning to see due to the coronavirus. But barring unexpected good news, it is a matter of time before this stimulus-fuelled rally fades, analysts said.

Asian markets mostly rose as governments tightened controls on businesses and travel, seeking to contain the pandemic.