Europe recovers but US stocks slide further

Growing job losses, virus cases in US, concerns of trade war batter sentiments

LONDON: European stock markets made modest gains Thursday, one day after a brutal selloff, while Wall Street fell further as job losses and coronavirus infections mounted in the United States.

Oil extended slightly Wednesday’s 5% tumble as increasing infections stoked demand worries just as the latest data showed a big jump in US stockpiles for a third week.

Asia extended losses after heavy overnight falls on Wall Street, amid holiday closures in Hong Kong and Shanghai.

There were hefty losses in New York and across Europe on Wednesday on heightened fears of a second wave of the deadly Covid-19 outbreak.

“After Wednesday’s big drop, the key development to watch on Thursday was whether there will be any further downside follow-through for stocks,” said ThinkMarkets analyst Fawad Razaqzada.

“Every dip has so far been bought. Will this be another such occasion, despite rising concerns over virus resurgence and resistance? Or are we finally going to see a sizeable correction this time?” Razaqzada asked. Concerns about a possible trade battle between Washington and Europe added to the downbeat mood, with a warning from the International Monetary Fund over the global outlook also souring sentiment.

A three-month surge across world markets, supported by the easing of lockdown measures and a wall of government cash, is showing signs of stalling as the virus sees a resurgence and raises questions about the pace of reopening. 

Published in The Express Tribune, June 26^th, 2020.

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