Europe Slips After Recent Gains as Virus Cases Mount
By Administrator_India
European stock markets traded lower Friday, with investors taking stock after recent hefty gains and as the coronavirus pandemic continues to reap damage throughout the region.
At 04:10 ET (0510 GMT), the U.K.’s FTSE index was trading 3.9% lower, France’s CAC 40 was down 3.0%, while the DAX fell 1.9%. The broader based Stoxx 600 Europe index dropped 2.5%.
The benchmark Stoxx 600 index has recovered almost 17% since hitting a low on March 16, but still remains more than 26% below its all-time high last month.
The number of Covid-19 infections have continued to mount worldwide, to well above 500,000, but the news from Italy, the epicenter of the outbreak in Europe, has been disappointing as infections surged Thursday by 6,153, the most in five days.
Recent numbers from the northern region of Lombardy suggested the epidemic might be slowing in this key area. But poorer southern parts are now seeing a sharp rise in deaths, raising fears the health service there could be overwhelmed.
The news in Spain isn’t much better, while Germany is feeling the impact of the pandemic with cases rising Friday by 5,780, compared with the previous day.
In corporate news, online property portal Rightmove said Friday that it will cancel its proposed final dividend for 2019 and suspend its financial guidance, due to the uncertainty surrounding the coronavirus pandemic. Rightmove shares dropped by 5.9%. The U.K. government intervened to effectively suspend the whole U.K. housing market on Thursday evening.
Shares in SSE also fell 4.7% as the energy company reaffirmed its dividend guidance for fiscal 2020, but added that it expects adjusted earnings at the lower end of its previous guided range.
There is little economic data of note due in Europe Friday, but market participants could look to the release of the University of Michigan’s March consumer confidence number, at 10:00 AM ET (14:00 GMT), for guidance.
The March consumer sentiment index is expected to drop to 90 from the preliminary measure of 95.9, according to economists’ forecasts compiled by Investing.com.
Investors will also be keeping a wary eye on the passage of the $2 trillion U.S. stimulus package through the House of Representatives Friday.
Oil has rebounded to a degree Friday, with gains in the U.S. contract, helped by the idea of additional stimulus in order to support demand as the coronavirus pandemic continues to slow economic growth. However, newswires reported Russia’s deputy energy minister as saying that a ‘fair’ price for oil was between $45-$55 a barrel, lower than the $60 level on which most European majors have based their planning in recent years.
At 5:10 AM ET, U.S. crude futures traded 0.9% higher at $22.81 a barrel. The international benchmark Brent contract fell 1.1% to $26.07.
Elsewhere, gold futures fell 1.9% to $1,620.70/oz, while EUR/USD traded at 1.1016, down 0.2% on the day.
