Global equities surged yesterday as reports of encouraging trials for a possible coronavirus drug injected optimism into the mood on trading floors.
But WTI oil prices tanked to a fresh 18-year low point, making a barrel of oil cheaper than a quality bottle of wine.
European stocks were 2.5% or more up at the close, but off their best levels as pre-weekend profit-taking set in. Wall Street was also solidly higher in the late New York morning, gaining close to 400 points on the DJIA index.
“The stock market rally could be here to stay as Wall Street becomes cautiously optimistic a treatment for the coronavirus is nearing,” said Edward Moya at Oanda. After Thursday’s closing bell in New York, reports emerged of encouraging trials for potential coronavirus drug remdesivir, made by US biotech firm Gilead Sciences.
“Any successful treatment drug would essentially mean that economies can reopen more quickly, good news for a rebound,” said City Index analyst Fiona Cincotta.
“The latest surge for stocks shows just how keen the market is to react to any piece of good news amid the current crisis,” said AJ Bell investment director Russ Mould.
In Europe, the coronavirus pandemic in Germany is “under control” thanks to measures imposed after an early surge in cases, Health Minister Jens Spahn declared on Friday, as the country prepares to ease restrictions.
That helped send Frankfurt and Paris equities fizzing higher.
“With the news of a potential beneficial treatment coming on the same day that Donald Trump laid out plans to reopen the US economy, there is a clear optimism over the possibility that some semblance of normality could soon return,” said IG analyst Joshua Mahony.
World oil prices have meanwhile collapsed this week in the face of chronic fears of a supply glut despite crude production cutbacks — as coronavirus-plagued energy demand continued to wilt.
In another volatile twist yesterday, West Texas Intermediate (WTI) crude for May delivery tumbled to its lowest point since 2002.
Technical moves ahead of the contract’s expiry next Tuesday added to the downward pressure, traders said.
The contract was down nearly 20% for the week, while Europe’s Brent was down 10% since Monday.
Meanwhile, there was some positive sentiment on the Chinese economy after data showed a 6.8% GDP contraction last quarter — the first negative growth reported since the country began logging quarterly data in the early 1990s.
The result was, however, slightly better than the fall of 8.2 % forecast by economists in an AFP poll.
In London, the FTSE 100 closed up 2.8% to 5,786.96 points; Frankfurt — DAX 30 ended up 3.2% to 10,625.78 points and Paris — CAC 40 closed up 3.4% to 4,499.01 points yesterday.
from Gulf Times https://ift.tt/2XJ69pV
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