Stocks - Europe Heads Lower; Dismal U.K. GDP Weighs
Investing.com
Published Jun 12, 2020 03:41AM ET
By Peter Nurse
Investing.com - European stock markets edged lower Friday, with the U.K. markets underperforming after very weak GDP figures illustrated the depth of the slowdown caused by the coronavirus outbreak.
At 3:45 AM ET (0745 GMT), the DAX in Germany traded 0.3% lower, France's CAC 40 fell 0.1%, the U.K.'s FTSE index was down 0.6%.
Earlier Friday, official data showed Britain's economy shrank by a record 20.4% in April from March as the country spent the month in a tight coronavirus lockdown.
In the three months to April, gross domestic product contracted by 10.4% from the previous three-month-period, the Office for National Statistics also said.
Stock markets had also sold off aggressively Thursday, after the Federal Reserve had warned of a slow recovery for the U.S. economy, the world’s largest, from the ravages of the Covid-19 virus as well as from renewed fears of a second wave as economies are gradually reopened.
“Certainly there are going to be some second-wave concerns so it is right for the market to be worried about that...we also had seen an incredible rally from the bottom so the idea that investors might be looking to take some profits here is certainly what’s driving the sell-off as well,” said Lori Heinel, State Street (NYSE:STT) Global Advisors deputy global chief investment officer, Bloomberg reported.
Corporate news was thin on the ground Friday, but U.K.-based publishing and education company Pearson (LON:PSON) soared almost 7% after it was reported that activist investment firm Cevian Capital had built a stake of just over 5%.
Oil prices continued to head lower Friday, heading for the first weekly loss since late April on fears a second Covid-19 wave could derail a fragile recovery, while swelling stockpiles raised fresh concerns about excess supply.
At 3:45 AM ET, U.S. crude futures traded 3.7% lower at $34.99 a barrel. The international benchmark Brent contract fell 3.3% to $37.28.
Elsewhere, gold futures fell 0.1% to $1,738.50/oz, while EUR/USD traded at 1.1308, up 0.1%.
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