Europe Lower; Attention Turns Back to Economic Damage

Stocks sell-off as coronavirus surge knocks recovery hopes

By Administrator_India

Capital Sands

European stock markets edged lower Wednesday, following on from losses on Wall Street overnight amid doubts over the proximity of a Covid-19 vaccine.

At 4 AM ET (0800 GMT), the DAX in Germany traded 0.7% lower, France’s CAC 40 fell 1%, while the U.K.’s FTSE index was down 0.6%.

Late Tuesday, the Dow Jones Industrial Average fell 1.6%, or 390 points, the S&P 500 fell 1.1%, and the Nasdaq Composite slipped 0.5%, after a news report cooled some of the optimism surrounding Moderna’s potential Covid-19 vaccine.

Given this, attention turned back to the latest economic data which showed the depth of the economic slowdown in the region. Unemployment rose at its fastest pace on record in the Netherlands in April, with young workers hit hardest, while Britain’s inflation rate sank in April to its lowest since August 2016 as the coronavirus pandemic pushed down global oil prices and apparel retailers cut prices.

In corporate news, Rolls-Royce dropped 2.5% after saying it would cut at least 9,000 jobs from its global staff of 52,000 to adapt to the much smaller aviation market that will emerge from the coronavirus pandemic.

On the flip side, retailer Marks & Spencer rose 1% after saying that it would accelerate its latest turnaround program as it dealt with the fallout from the coronavirus crisis and reported a 21% fall in annual profit. Investors were cheered by the strong performance of its joint venture in the food business with Ocado.

Experian  stock soared over 7% despite the world’s biggest credit data company saying on Wednesday it expects fiscal first-quarter organic revenue to decline by 5% to 10% if coronavirus-related restrictions continue to impact business throughout the period.

The crude oil market followed the equity counterpart lower, handing back some of recent strong gains.

At 4:00 AM ET, U.S. crude June futures traded 0.8% lower at $31.70 a barrel. The international benchmark Brent contract fell 0.3% to $34.54.

Elsewhere, gold futures rose 0.4% to $1,752/oz, while EUR/USD traded at 1.0942, up 0.2%.

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