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Stock markets retreat as oil calms

25 April 2020 12:00 am - 0     - {{hitsCtrl.values.hits}}

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AFP - Stock markets slid yesterday following more crushing economic data and a hit to hopes of finding a coronavirus vaccine, analysts said.


European equities were knocked also by news that EU leaders stood divided over the size of a financial rescue package to stimulate the bloc’s economy left battered by the pandemic.


“They seem to have agreed on the idea of a recovery fund while leaving the details for a future date,” Oanda analyst Craig Erlam told AFP. 


The United States yesterday approved nearly half a billion dollars in new stimulus but European leaders were split on their own measures as the world sought to salvage economies hammered by the coronavirus pandemic.
US stocks ended flat Thursday and Tokyo dropped yesterday, following reports that the closely-watched antiviral drug remdesivir has had no effect on patients in a coronavirus test.


Economic data released yesterday added to the bleak outlook.


German business confidence plummeted to a record low in April as firms fret over COVID-19 fallout, the closely-watched Ifo survey said, describing morale as “catastrophic”.


The institute’s monthly business climate index tumbled to 74.3 points, down from March’s 85.9 points.


Britain’s retail sales by volume meanwhile slumped by a record 5.1 percent last month as the country’s lockdown shut clothes and other stores, offsetting surges in food and alcohol purchases and online buying, official data showed.


The European readings came after the US on Thursday said 4.4 million people applied for unemployment benefits last week, taking the total virus-fuelled job losses in the country to more than 26 million.


Adding to the downbeat mood was a Financial Times report that said initial trials of the remdesivir coronavirus drug being developed by Gilead Sciences had flopped.


The news was a blow to investors and while Gilead said it was still awaiting data from multiple studies of the drug, which has shown promise in some analyses.


While stock markets struggled, oil was enjoying another day of gains, albeit far more modest than the 20-percent surge for WTI on Thursday triggered by a new flare-up between Washington and Tehran. 


Iran warned the US of a “decisive response” after President Donald Trump said he ordered the US Navy to destroy Iranian boats that harass American ships in the Gulf.


Gains in crude prices were unlikely to be sustained, observers warned, as storage facilities are near to bursting with demand almost non-existent - a situation that sent the May contract for WTI to minus US$ 40 this week.


“There is little in the way of fundamental developments to support the move higher, although given the amount of weakness recently, we were due a relief rally,” said Warren Patterson and Wenyu Yao at ING.


“Renewed tensions between the US and Iran will likely be providing some support, but... this will likely be short-lived unless we see a further escalation.”

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