Global stocks mixed, oil tanks on virus demand fears

Agence France-Presse . London | Published: 23:08, Jul 10,2020


European stock markets held firm on Friday, but oil prices sank once more as investors wearily eyed rising coronavirus infection rates and awaited next week’s corporate earnings reports.

In late morning deals London stocks won 0.4 per cent, Frankfurt added 0.4 per cent and Paris won just 0.2 per cent.

‘We are in wait-and-see mode. Lots of speculation and news flow but nothing is fundamentally changing at the moment,’ OANDA analyst Craig Erlam told AFP.

‘Earnings season kicks off next week — perhaps we will see a little more (movement) then.’

On the downside in Asia, Hong Kong stocks sank 1.8 per cent as a fresh outbreak in the city prompted authorities to reimpose measures including the closure of schools.

World oil prices dived about two per cent in value, extending Thursday’s heady losses, as traders fretted that COVID-19 would further savage global crude demand.

The Paris-based International Energy Agency warned that the resurgence of the coronavirus in some parts of the world injected added uncertainty into the market — but it nevertheless forecast a recovery in output.

‘Fears surrounding the health crisis and the possibility that lockdowns will be reintroduced weighed on oil,’ noted City Index analyst Fiona Cincotta.

‘The energy market is very sensitive to the perception about the health of the global economy.’

Gold prices advanced, having already hit a near nine-year high earlier this week as investors sought a safe investment to park their cash.

In contrast to European stocks, Asian equities sank on Friday as rising infection rates put the brakes on the region’s latest rally.

Markets have generally displayed a healthy resilience to the rapid spread of the disease around the world, with hopes for the economic recovery, the easing of lockdowns and government largesse providing crucial support.

But several days of figures showing a record number of new cases in populous US states including Florida, Texas and California — leading to the reimposition of containment measures — were beginning to sink in.

A lockdown in Australia’s second-biggest city Melbourne added to investor worries in Asia.

‘The global battle with COVID-19 apparently has no end in sight,’ said Russ Mould, investment director at stockbroker AJ Bell.

‘The situation with coronavirus feels less like a second wave and more like aftershocks from the initial earthquake caused by the pandemic.

‘These fresh, often localised outbreaks, in countries which apparently had the virus under control, likely won’t create the kind of disruption seen when lockdown measures were at their height, but will still hamper any economic recovery.’

In New York on Thursday, the Dow fell more than one per cent, with traders unmoved by data showing the number of US workers filing for unemployment benefits last week fell by 99,000.

The US saw 65,551 new coronavirus cases, a record for a 24-hour period, with top infectious diseases expert Anthony Fauci calling for a pause in states’ reopenings.

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