Shares fell back in Europe on Thursday following the release of worse-than-expected data showing the regional economy contracted by a record 3.8% in the last quarter as business activity was frozen by shutdowns aimed at curbing the spread of the coronavirus.
France’s CAC 40 was flat at 4,672.99 while Germany’s DAX lost 0.1% to 11,097.68. Britain’s FTSE 100 slipped 0.2% to 6,101.66. U.S. shares were steady, with the future contract for the Dow industrials up 0.1% to 24,598.0. The S&P 500 future also gained less than 0.1%, to 2,943.38.
The bleak European numbers put paid to a rally in the U.S. and Asia that was driven by optimism about a possible treatment for the coronavirus.
An upswell of hope about curbing the pandemic was so strong that investors shrugged off a report showing the U.S. economy shrank at a 4.8% annual rate in the first three months of the year.
The experimental drug remdesivir was reported to be effective against the new coronavirus in a study run by the National Institutes of Health. The nation’s top infectious diseases expert said the drug reduced the time it takes patients to recover, raising hopes that life around the world may eventually tiptoe back toward “normal.”
Japan’s benchmark Nikkei 225 surged 2.1% to finish at 20,193.69, while Australia’s S&P/ASX 200 gained 2.4% to 5,522.40. The Shanghai Composite added 1.3% to 2,860.08.
India’s Sensex climbed 2.4% to 33,494.89. Shares also rose in Taiwan and Southeast Asia.
Markets in South Korea and Hong Kong were closed for holidays. Many other markets will be closed on Friday for May Day.
“With the refreshed optimism on the COVID-19 end, Asia markets can likewise be seen charging ahead into what will be the end of week for many markets in the region.” said Jingyi Pan, a market strategist for IG in Singapore.
China’s manufacturing activity weakened in April as the coronavirus pandemic clobbered global consumer demand, hampering Beijing’s efforts to revive the world’s second-largest economy.
Surveys by a Chinese magazine and an official industry group showed activity slipped back after rebounding in March following the closure of much of China’s economy to fight the virus. A sub-measure for exports plunged.
China became the first major economy to reopen factories in March after the ruling Communist Party declared victory over the outbreak. But the United States, Europe and other major markets have yet to lift controls that are depressing consumer spending.
Nations around the world have laid out plans to relax restrictions keeping people at home and businesses bereft of customers. Any new treatment for COVID-19 could also lower the dread so prevalent among households and businesses around the world.
Benchmark U.S. crude oil rose $2.05 to $17.11 a barrel in electronic trading on the New York Mercantile Exchange. It rose $2.72, or 22%, to settle at $15.06 a barrel on Wednesday. Brent crude oil, the international standard, rose $1.68 to $24.22 a barrel.
The U.S. dollar inched down to 106.64 Japanese yen from 106.67 yen Wednesday. The euro was little changed at $1.0877 from $1.0875.