Stock Markets Hit By Virus Shocks

London, (UrduPoint / Pakistan Point News - 22nd Jan, 2021 ) :World stock markets retreated Friday as investors fretted about the economic impact of fresh virus shocks and the threat of stricter confinement measures.

A raft of economic data highlighted the worsening situation for Europe, which is on course for a double-dip recession as new Covid lockdowns hit hard, although US data were relatively strong.

After a mini boost for equities earlier in the week as US President Joe Biden took office, stock markets are also heading lower again as concerns mount that his $1.9-trillion rescue plan could hit hurdles.

The Dollar was mixed while oil prices fell as data showed US oil stockpiles rose.

Sterling, which Thursday hit a three-year high against the dollar on optimism over a UK vaccine rollout, then declined heading into the weekend on fresh recession expectations.

"The optimism of earlier in the week has evaporated," noted Chris Beauchamp, chief market analyst at IG trading group.

"Weaker... (data) readings and the prospect of a total UK travel ban have seen the leisure and travel sectors hit, as the outlook for the global economy continues to darken." While mooted travel bans in Europe were not immediately confirmed, "the very mention of them has soured sentiment in equities," said David Madden at CMC Markets UK.

European and Asian losses came despite a broadly positive lead from Wall Street on Thursday, where the Nasdaq fired to another record along with the S&P 500, though the Dow inched slightly lower.

The rises were helped by a series of upbeat US economic readings.

But European data released on Friday were far less optimistic.

A slowdown in eurozone business activity accelerated in January, making a new recession almost certain as Covid-19 continues to batter the 19-nation economy.

The closely watched PMI index compiled by IHS Markit is considered the earliest indicator of the state of the economy and the latest reading confirmed fears that the year-old virus crisis is still going strong.

"A double-dip recession for the eurozone economy is looking increasingly inevitable as tighter Covid-19 restrictions took a further toll on businesses in January," said Chris Williamson, chief business economist at IHS Markit.

The outlook was the same for Britain after its private sector activity was shown to have shrunk this month.

"A steep slump in business activity in January puts the locked-down UK economy on course to contract sharply in the first quarter of 2021, meaning a double-dip recession is on the cards," Williamson added.

Wall Street moved lower despite relatively encouraging economic data.

Record low mortgage rates helped push existing home sales to the highest level since 2006.

Meanwhile, IHS Markit's US composite PMI showed a sharp expansion in activity, with manufacturing a record jump.

The Dow was down 0.6 in midday trading, with IBM plunging more than 13 percent as it reported another drop in quarterly revenue.

Fellow blue-chip stock Intel shed over 8 percent despite reporting better-than-expected results as the chipmaker faces did not answer calls to outsource its manufacturing operations.

- Key figures around 1630 GMT - New York - Dow: DOWN 0.6 percent at 30,998.27 points EURO STOXX 50: DOWN 0.5 percent at 3,602.11 London - FTSE 100: DOWN 0.3 percent at 6,695.07 (close) Frankfurt - DAX 30: DOWN 0.2 percent at 13,873.97 (close) Paris - CAC 40: DOWN 0.6 percent at 5,559.57 (close) Tokyo - Nikkei 225: DOWN 0.4 percent at 28,631.45 (close) Hong Kong - Hang Seng: DOWN 1.6 percent at 29,447.85 (close) Shanghai - Composite: DOWN 0.4 percent at 3,606.75 (close) Euro/dollar: UP at $1.2174 from $1.2169 at 2150 GMT Dollar/yen: UP at 103.79 Yen from 103.50 yen Pound/dollar: DOWN at $1.3663 from $1.3735 Euro/pound: DOWN at 89.10 pence from 88.59 penceWest Texas Intermediate: DOWN 1.2 percent at $52.52 per barrelBrent North Sea crude: DOWN 0.9 percent at $55.57 per barrel