Shares have advanced in Europe after a day of losses in Asia following Wall Street's overnight sell-off on worries over a possible “second wave” of coronavirus cases
By
YURI KAGEYAMA AP Business Writer
June 12, 2020, 9:43 AM
3 min read
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Share to FacebookShare to TwitterEmail this articleShares rose in Europe on Friday after a day of losses in Asia following Wall Street’s overnight sell-off on worries over a possible “second wave” of coronavirus cases.
The CAC 40 in Paris jumped 1.2% to 4,875.41, while Germany’s DAX added 0.7% to 12,056.57.
Britain’s FTSE 100 recovered from early losses to gain 1.1%, rising to 6,146.14. Shares initially fell on news that the British economy contracted by 20.4% in April amid lockdown measures to fight the pandemic, wiping out nearly two decades worth of growth.
U.S. shares were set for a rebound, with Dow futures up 2.1% at 25,543.00. S&P 500 futures gained 1.7% at 3,051.00.
Losses were milder in global markets than in the U.S. on Thursday, partly because markets in the region have not seen the same massive gains in recent weeks: outbreaks of the virus, travel disruptions and business shutdowns remain apparent and hopes for a quick rebound more modest.
Japan's benchmark Nikkei 225 plunged on the open but ended down only 0.8%, at 22,305.48.
South Korea's Kospi lost 2% to 2,132.30. Australia's S&P/ASX 200 skidded 1.9% to 5,847.80. Hong Kong's Hang Seng shed 0.7% to 24,301.38, while the Shanghai Composite was little changed, shedding 1 point to 2,919.74.
Shares also fell in Taiwan, India and Thailand.
It is unclear if the panic that took hold on Thursday was a momentary lapse in optimism or more of a reality check.
“Wall Street analysts are pointing to the gap between fundamentals and valuation saying it was long overdue, and finally, the market listens," Stephen Innes of AxiCorp said in a commentary
“Regardless of what side of the fence you are on, you must concede we are at a critical inflection point where we will have to see which channel opens up and where the next 5% move will take us," he said.
Thursdays bout of selling came as reports showed U.S. cases climbing in nearly half the 50 states.
In Japan, daily newly confirmed cases have fallen to double-digit levels, workers are returning to work and stores are reopening. But without a strong U.S. recovery there are scant expectations for an escape from recession, analysts say.
“It appears that worries about ‘second wave’ of infections have hit, with a swell in the number of cases in states like Arizona and Texas giving cause for concern,” said Riki Ogawa at Mizuho Bank's Asia and Oceania Treasury Department, noting U.S. Treasury Secretary Steven Mnuchin has said the U.S. can't afford another lockdown.
“Reports of positive cases from the global protest marches are probably also unearthing fears that a ‘second wave’ may squander the costly curve flattening efforts taken earlier,” Ogawa said.
In other trading, benchmark U.S. crude oil rebounded, gaining 23 cents to $36.57 per barrel in electronic trading on the New York Mercantile Exchange. It fell $3.26 to settle at $36.34 a barrel on Thursday. Brent crude oil picked up 27 cents to $38.83 a barrel.
The dollar rose to 107.30 Japanese yen from 106.86 yen. The euro gained slightly to $1.1336 from $1.1294.
