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business
Tuesday May 12 2020
By
AFP

European stocks turn sour after bright start

By
AFP
Reuters/Files

LONDON: European stock markets slid Monday after opening with gains, while the dollar jumped and oil prices retreated as a new week kicked off with more volatility fuelled by coronavirus twists and turns.

"The buoyant mood from last week carried into the open of trading this week with Asian markets closing higher... and Europe starting on the front foot as the disconnect between economic data and financial markets continued," noted Fawad Razaqzada, analyst at ThinkMarkets trading group.

"But the indices started to give up their gains... in what is a quiet day for economic data."

Around 1145 GMT, London was down 0.3 percent, Frankfurt lost 1.0% and Paris slid 1.6%.

Earlier in Asia, Tokyo, Hong Kong, Sydney and Taipei all ended up more than one percent.

Shanghai gave up early gains to end marginally lower despite a pledge by the People's Bank of China to deliver "more powerful" policies to support the world's number two economy.

Sri Lanka's stock exchange was shut 38 seconds after opening for the first time following a 52-day virus lockdown, as a plunge in share prices triggered a circuit breaker.

Observers warned that the global outlook remained murky amid concerns of a second virus wave hitting South Korea and China which have slowly reopened their economies.

China on Monday reported the first new infections in over a month in Wuhan, where the outbreak started, leading to a pandemic that has crushed the world economy.

Official figures on Friday showed a record 20.5 million people were laid off in the US in April, sending unemployment soaring to 14.7% , the highest since the Great Depression.

However, the reading was slightly lower than forecasts and Wall Street ended the week with strong gains as the focus turned to plans to lift restrictions that have kept billions of people around the world stuck at home for months.

"There is hope within this labyrinth of statistical perversity," said AxiCorp analyst Stephen Innes.

"The vast majority of job losers anticipate being recalled. Temporary layoffs on this scale have never happened — like almost every data point in this jobs report — and the hope is that it leads to a rather rapid return to work."

Elsewhere Monday, oil prices slid on profit-taking after surging last week on hopes for a pick-up in demand.

Saudi Arabia on Monday unveiled plans to triple its value added tax and halt monthly allowances to citizens as part of a series of austerity measures amid record low oil prices and a coronavirus-led economic slump.

Key figures around 1145 GMT 

London - FTSE 100: DOWN 0.3 percent at 5,916.80 points

Frankfurt - DAX 30: DOWN 1.0% at 10,795.21

Paris - CAC 40: DOWN 1.6% at 4,478.16

EURO STOXX 50: DOWN 1.1% at 2,874.82

Tokyo - Nikkei 225: UP 1.1% at 20,390.66 (close)

Hong Kong - Hang Seng: UP 1.5% at 24,602.06 (close)

Shanghai - Composite: FLAT at 2,894.80 (close)

New York - Dow: UP 1.9% at 24,331.32 (close)

West Texas Intermediate: DOWN 3.0% at $24.00 per barrel

Brent North Sea crude: DOWN 3.1% at $30.02 per barrel

Euro/dollar: DOWN at $1.0815 from $1.0836 at 2040 GMT on Friday

Dollar/yen: UP at 107.31 yen from 106.73 yen

Pound/dollar: DOWN at $1.2301 from $1.2402

Euro/pound: UP at 87.93 pence from 87.34 pence