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European Shares Set To Extend Losses On Economic Worries

stockmarkets aug16 16apr20 lt

European stocks may drift lower at open on Thursday as weak U.S. data released overnight added to the gloom on markets.

China has reopened factories, shops and other businesses but it may not be enough to overcome the heavy drag from suppressed world demand.

According to an AFP poll of economists, China's economy may have shrunk 8.2 percent from a year ago in the first quarter—the first contraction since quarterly data started to be reported in the early 1990s.

In the United States, President Donald Trump has leaned into his desire to reopen the nation's economy by May 1, but many of the governors and mayors who hold the power to enforce closures seem to disagree.

They want a gradual process to prevent the coronavirus from rebounding. Trump said he would announce today guidelines to relax stay-at-home rules.

Virus worries persist after the United States on Wednesday reported nearly 2,600 additional deaths from the new coronavirus in 24 hours, a new record and the heaviest daily toll of any country, according to Johns Hopkins University.

The total number of coronavirus cases surpassed two million globally, with Europe emerging as the worst hit continent. Fatalities around the world topped 137,000.

Asian markets declined today along with U.S. stock futures while oil bounced back as rising stockpiles pointed to lower output. Mexico's peso retreated after Fitch downgraded the country's debt rating.

British retail sales declined at a record pace in March due to measures taken to fight the spread of coronavirus, data from the British Retail Consortium showed earlier today.

According to BRC-KPMG retail sales monitor, retail sales decreased 4.3 percent on a yearly basis in March, the sharpest fall since records began in 1995. At the same time, like-for-like sales declined 3.5 percent from the same period last year.

U.S. jobless claims for the week ending April 11 will be the key later today as investors look nervously to Friday when China releases its gross domestic product data for the first quarter.

U.S. stocks tumbled overnight as weak earnings results from financial giants Bank of America, Goldman Sachs and Citigroup as well as dismal retail sales, manufacturing and industrial production data reminded investors of the devastating impact of the coronavirus pandemic.

The Dow Jones Industrial Average shed 1.9 percent, the tech-heavy Nasdaq Composite lost 1.4 percent and the S&P 500 declined 2.2 percent.

European stocks tumbled on Wednesday as oil prices sank and the IMF warned that the global economy will likely suffer the worst financial crisis in 2020 since the Great Depression.

The pan-European Stoxx Europe 600 index fell 3.2 percent to snap a five-session winning streak. The German DAX slumped 3.9 percent, France's CAC 40 index plummeted 3.8 percent and the U.K.'s FTSE 100 plunged 3.3 percent.

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