NEW YORK, April 8 ― World stock markets rose yesterday led by gains in Europe and Asia as signs of progress in curbing the spread of the novel coronavirus fuelled investors’ appetite for risk, though a steep, late sell-off on Wall Street erased gains in US stocks.
Oil prices ended the day deep in the red as hopes of a deal to decrease supply turned into uncertainty and a surge in crude and gasoline stockpiles dragged prices down further.
The euro jumped against the greenback after six sessions of declines.
New York state, the US epicentre of Covid-19, is nearing a plateau in number of patients hospitalised, Governor Andrew Cuomo said, a hopeful sign even as deaths in his state and neighbouring New Jersey hit single-day highs.
Worldwide, the novel coronavirus has infected more than 1.3 million people and killed over 74,000, and although the numbers are still rising in many highly populated countries, some tentative improvements have given hope.
“The rally is sentimental and a little premature because if we lift these lockdown measures too soon and try to resume economic activity, we’re going to get a very severe pandemic rebound,” said Indranil Ghosh, chief executive officer of Tiger Hill Capital in London.
The comment echoed that of the World Health Organization, which warned earlier yesterday against easing coronavirus measures too early.
The Dow Jones Industrial Average fell 26.13 points, or 0.12 per cent, to 22,653.86, the S&P 500 lost 4.27 points, or 0.16 per cent, to 2,659.41 and the Nasdaq Composite dropped 25.98 points, or 0.33 per cent, to 7,887.26.
The S&P closed near its lows of the session, giving up an earlier gain of as much as 3.5 per cent.
The pan-European STOXX 600 index rose 1.88 per cent and MSCI’s gauge of stocks across the globe gained 0.97 per cent.
Emerging market stocks rose 2.85 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 2.53 per cent higher.
Japan’s Nikkei posted a 2 per cent gain overnight as its government promised a near-US$1 trillion (RM4.33 trillion) stimulus package ― equal to a fifth of its gross domestic product.
With market optimism on the rise, the US dollar dropped and riskier currencies outperformed as risk appetite improved on hopes that lockdowns may be slowing the spread of the coronavirus in some countries.
Action by central banks to ease a scramble for dollars has also helped bring some calm to markets, with massive US stimulus programmes and debt issuance seen weighing on the greenback.
“We’ve got a nice decline in volatility across forex and equity markets,” said Kenneth Broux, FX strategist at Societe Generale.
“We know central banks have done a very good job in alleviating the strain in dollar markets and that’s feeding through.”
The dollar index, tracking the greenback against six major currencies, fell 0.77 per cent, with the euro up 0.9 to US$1.0889.
The Japanese yen rose 0.46 per cent versus the greenback at 108.7 per dollar, while Sterling ended at US$1.2337, up 0.88 per cent.
Oil slumps
Oil prices gave up early gains to fall sharply as hopes that the world’s biggest producers would agree to cut output were overtaken by anxiety that a deal would not emerge. Data showing crude stockpiles surged by much more than expected further weighed on prices.
US crude recently fell 6.98 per cent to US$24.26 per barrel and Brent was at US$32.50, down 1.66 per cent on the day.
― Reuters
