Investors will be focusing on European stocks today, ahead of industrial production data from the Eurozone.
Context: European stocks closed lower on Wednesday amid growing concerns over the extent of damage to the global economy from the coronavirus pandemic. Investors were also assessing dismal earnings reports from various major companies.
Details: Recent gains in equities were driven by optimism of a slowdown in coronavirus cases and plans announced by various governments to lift some lockdown restrictions.
While the UK and France are planning to extend lockdown measures till early May, Spain, Italy and Denmark intend to ease the lockdowns in their respective economies.
Even as containing the coronavirus has become a priority across the globe, US President Donald Trump on Tuesday announced plans to suspend funding the WHO, blaming the health agency for making mistakes that resulted in “so much death” related to COVID-19.
Investor confidence was shaken yesterday by the IMF’s warning issued on Tuesday, projecting the global economy to contract by 3% this year, versus its January prediction of 3.3% growth.
The pan-European Stoxx 600 index dropped 3.3%, with oil and gas stocks among the worst performers in Wednesday’s session and all major sectors trading in negative territory. The FTSE 100 index also declined by 3.3%, while German 30 was down by 3.8%.
Shares of British cinema firm Cineworld plummeted 22%, while German meal company Hellofresh bucked the market trend, gaining around 6%.
What to watch: Investors will be closely monitoring the daily coronavirus numbers. The number of positive COVID-19 cases in Italy has surpassed 165,150 with around 21,640 deaths. Spain has so far confirmed more than 180,650 cases with 18,810 fatalities. Germany and France have also confirmed more than 134,000 coronavirus cases each as per the latest data.
Markets are awaiting the industrial production report from the Eurozone, along with some data from Germany. The Eurozone industrial production, which rose 2.3% in January, is expected to decline 0.2% in February.
Other Markets: US indices closed lower on Wednesday, with the Dow, S&P 500 and Nasdaq 100 down by 1.86%, 2.20% and 1.44%, respectively.