Global equities rebound from virus-fuelled losses

Traders, however, are on tenterhooks before US jobless claims data

LONDON: Global equities mostly rebounded on Thursday from recent coronavirus-fuelled losses as oil rallied on hopes of an end to a Saudi Arabia-Russia price war, and resurgent Chinese energy demand, dealers said.

Traders were on tenterhooks before US jobless claims data, which will again lay bare the impact of COVID-19 on the world’s biggest economy after dire figures last week.

In midday deals, the London stock market advanced 0.3% with energy majors BP and Shell winning almost 10% on the back of soaring crude futures that lift profits.

In the euro zone, Frankfurt added 0.4%, Milan won 0.8% and Paris gained 0.7%.

Oil soared more than 10% on hopes for a US intervention to end a Saudi Arabia-Russia price war, with President Donald Trump saying he expected the two to resolve the row, while dealers were also cheered by China’s decision to snap up bargain crude.

“We do appear to be seeing some gains ... on a couple of headlines that China will start topping up its state reserves, and that Saudi Arabia is supporting cooperation amongst oil producers to stabilise oil markets,” said CMC Markets analyst Michael Hewson.

“These gains are helping support rebounds in Royal Dutch Shell and BP’s share prices, as well as modest stabilisation in early trading for European markets.”

On the downside, Madrid stocks dived 1.1% on news that the coronavirus death toll in Spain has surged past 10,000 after a record 950 deaths in 24 hours, while the number of confirmed cases passed the 110,000 mark.

The deadly coronavirus is keeping traders on edge as it sweeps the planet, with infections approaching one million and countries forced to tighten already strict lockdown measures.

Equities were gripped on Wednesday by a global rout as the human and economic toll from the coronavirus rose.

After two weeks of much-needed gains fuelled by trillions of dollars in stimulus and widespread monetary easing, focus has returned to the devastation wrought on populations and the long-term impact of the pandemic.

US President Donald Trump’s COVID-19 task force has warned America could see almost a quarter of a million deaths and the president warned of a “horrific” couple of weeks ahead.

His sobering comments came as a number of countries said they would extend lockdowns, which have already gouged economies around the world.

Adding to the unease on trading floors was a report saying China had masked the true extent of the virus in the country, which is just coming out of an extended shutdown.

Later on Thursday, eyes are on the release of US jobless claims figures for last week, which some estimates have put at a mind-boggling 6.5 million.

Asia faced a mixed session, with Tokyo down 1.4%, while Sydney and Kuala Lumpur shed 2% apiece and Singapore dropped 0.2%. There were also losses in Wellington and Manila.

But Hong Kong rose 0.8% and Shanghai rallied 1.7%, with Seoul and Bangkok up more than 2%. Jakarta put on more than 1%.

“Investors are struggling to look through President Trump’s ominous forecast suggesting Americans could keep dying into June,” said AxiCorp’s Stephen Innes, adding that investors were a “bundle of nerves”.

Crude rallied after Beijing called on authorities to buy up the battered commodity to fill its reserves, helping ease supply pressure after demand fell off a cliff and producers ramped up output.