Share

Stock markets plunge on devastating growth data

accreditation

Stock markets plunged on Thursday after economic growth data confirmed fears of Covid-19's bruising impact on the world economy.

Key eurozone markets were more than 2% down at the close, while London dropped even more sharply.

On Wall Street the Dow Jones index was around 250 points lower in the late New York morning trading, depressed by another spike in jobless claims.

The EU economy shrank 3.5% in the first quarter, the first major indication of the devastation facing the bloc as a result of coronavirus.

Separate figures revealed that the jobless total in Europe's biggest economy Germany soared 13.2% in April.

The European Central Bank, also on Thursday, promised that it was ready to reload its weapons to help offset the economic impact of the coronavirus, notably by buying more bonds.

But the fact it hadn't already done so left some analysts disappointed.

'Some doubt'

"The Bank's failure to expand its asset purchase programmes leaves some doubt about policymakers' commitment to ensure that the huge economic shock which the region is experiencing does not morph into a new sovereign debt crisis," said Capital Economics.

The euro rose against the dollar after ECB chief Christine Lagarde said the monetary policy council had not discussed widening its asset buying programme to include junk bonds.

Across the Atlantic, the Federal Reserve, warning of worse to come, pledged on Wednesday to keep US interest rates at zero until the economy has weathered the crisis and is ready to resume growth.

On Thursday, it said it would expand its Main Street loan programme.

Asia doing ok

Earlier on Thursday, however, Asian stocks advanced, with top US epidemiologist Anthony Fauci saying that Gilead Science's remdesivir drug "has a clear-cut, significant, positive effect in diminishing the time to recovery" from the coronavirus.

His comments fanned hopes that lockdowns - already being loosened in some nations - could be lifted more quickly, allowing people back to work to kickstart the battered economy.

"While a treatment is not a vaccine, a successful treatment would be a game-changer for the virus and would help facilitate a greater rollback of containment measures," said National Australia Bank's Tapas Strickland.

"It could also give consumers greater confidence to resume pre-pandemic activity."

On crude markets, both main contracts soared for a second day -- with WTI's gain adding to a 25% advance Wednesday.

Oil prices had been hammered last week by worries over almost non-existent demand and a lack of storage facilities, which offset a massive cut in output by major producers.

Key figures around 15:40 GMT: 

  • London - FTSE 100: DOWN 3.5 percent at 5,901.21 points (close)
  • Frankfurt - DAX 30: DOWN 2.2 percent at 10,861.64 (close)
  • Paris - CAC 40: DOWN 2.1 percent at 4,572.18 (close)
  • EURO STOXX 50: DOWN 2.6 percent at 2,917.40
  • New York - Dow: DOWN 1.0 percent at 24,37719
  • Tokyo - Nikkei 225: UP 2.1 percent at 20,193.69 (close)
  • Shanghai - Composite: UP 1.3 percent at 2,860.08 (close)
  • Hong Kong - Hang Seng: Closed for a holiday
  • West Texas Intermediate: UP 16.7 percent at $17.57 per barrel
  • Brent North Sea crude: UP 9.0 percent at $26.42
  • Euro/dollar: UP at $1.0944 at $1.0874
  • Dollar/yen: UP at 106.94 yen from 106.66 yen
  • Pound/dollar: UP at $1.2608 from $1.2467
  • Euro/pound: DOWN at 86.78 pence from 87.22 pence
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.0%
Rand - Pound
23.91
-0.0%
Rand - Euro
20.41
+0.1%
Rand - Aus dollar
12.33
+0.1%
Rand - Yen
0.13
-0.0%
Platinum
908.05
+1.2%
Palladium
1,014.94
+1.3%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders