European stock markets slid Monday after opening with gains as coronavirus twists and turns made for more volatility and fears of a second wave of coronavirus infections took their toll. Reports AFP.
“The buoyant mood from last week carried into the open of trading this week,” said Fawad Razaqzada, analyst at the ThinkMarkets trading group. “But the indices started to give up their gains… in what is a quiet day for economic data,” he said.
The possibility of a fresh wave of coronavirus infections kept investors on edge, said Craig Erlam, at OANDA. “Fears of a second wave are already emerging in South Korea, China and maybe even Germany which should be a lesson to those countries preparing for looser restrictions,” he said.
On Wall Street, the Dow Jones index was also lower at the opening bell.
Statistical perversity
Earlier, several markets in Asia had closed higher, but 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.
Observers warned that the global outlook remains 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 percent, the highest since the Great Depression.
“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 were mixed 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 1335 GMT
London – FTSE 100: DOWN 1.2 percent at 5,872.58 points
Frankfurt – DAX 30: DOWN 1.1 percent at 10,782.49
Paris – CAC 40: DOWN 1.6 percent at 4,478.39
EURO STOXX 50: DOWN 1.2 percent at 2,874.03
New York – Dow: DOWN 1.0 percent at 24,086.98
Tokyo – Nikkei 225: UP 1.1 percent at 20,390.66 (close)
Hong Kong – Hang Seng: UP 1.5 percent at 24,602.06 (close)
Shanghai – Composite: FLAT at 2,894.80 (close)
West Texas Intermediate: UP 1.6 percent at $25.13 per barrel
Brent North Sea crude: DOWN 0.1 percent at $30.93
Euro/dollar: DOWN at $1.0830 from $1.0836 at 2040 GMT on Friday
Dollar/yen: UP at 107.36 yen from 106.73 yen
Pound/dollar: DOWN at $1.2334 from $1.2402
Euro/pound: UP at 87.82 pence from 87.34 pence ♦
