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GLOBAL MARKETS-World shares mixed amid hopes for business pickup; oil slides

Published 07/05/2020, 03:37 am
Updated 07/05/2020, 03:42 am
© Reuters.
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(Adds close of European market)

By Herbert Lash

NEW YORK, May 6 (Reuters) - Oil prices slid and world equity markets seesawed on Wednesday as investor hopes for a pickup in business activity were weighed against downbeat economic data and low fuel demand highlighted by a rise in U.S. crude stockpiles to three-year highs.

The safe-haven Japanese yen and dollar rose on data showing U.S. private payrolls tumbled to a record 20.2 million in April, German industrial orders fell at a record pace in March and British construction activity fell to an all-time low last month.

The dollar index =USD rose 0.279%, with the euro EUR= down 0.3% to $1.0805. The Japanese yen JPY= strengthened 0.54% versus the greenback at 106.05 per dollar.

Retail sales in the euro zone also suffered their largest decline on record in March. has collapsed globally because of the coronavirus epidemic and many investors see the prospect of a swift recovery as difficult, despite the gradual opening of economies worldwide that has given hope to others.

Trying to gauge economic growth in light of the pandemic has sent investors searching for new insights, especially in China as its economy was first to reopen, said Yousef Abbasi, global market strategist at INTL FCStone Financial Inc in New York.

"When are you going to see those businesses retake capacity comparable to the last year? That's the big question," Abbasi said. "It really is about where you think demand is going to come back or where you think demand never really dropped off."

Technology stocks led gainers as stocks perceived to be resilient to a changing economic and work environment.

"The leadership has come from stocks that benefit from stay-at-home economy," said Jack Janasiewicz, portfolio strategist at Natixis Investment Managers.

The pan-European STOXX 600 index .STOXX closed down 0.35%while MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.02%.

On Wall Street, the Dow Jones Industrial Average .DJI fell 26.73 points, or 0.11%, to 23,856.36. The S&P 500 .SPX gained 1.93 points, or 0.07%, to 2,870.37 and the Nasdaq Composite .IXIC added 100.47 points, or 1.14%, to 8,909.59.

The blue-chip Dow came under pressure from declines in oil giant Chevron Corp (NYSE:CVX) CVX.N as crude prices fell. The S&P 500 energy sub-index .SPNY dropped 1.7%.

General Motors Co (NYSE:GM) GM.N jumped 4.1% after the automaker topped profit expectations and outlined plans for a May 18 restart of most of its North American plants. Health Corp CVS.N gained 1.2% after reporting a better-than-expected quarterly profit. slid below $30 a barrel as crude stocks rose and gasoline demand remained below normal seasonal levels, snapping a six-day winning streak for Brent futures that helped the global benchmark almost double in price from a 21-year low on April 22.

U.S. crude inventories USOILC=ECI rose by 4.6 million barrels in the week to May 1 to 532.2 million barrels, compared with analysts' expectations in a Reuters poll for a 7.8 million-barrel rise. EIA/S

U.S. crude CLc1 fell 6.03% to $23.08 per barrel and Brent LCOc1 was at $28.96, down 6.49% on the day.

Healthcare stocks .SXDP rose in Europe on the back of better-than-expected quarterly results from Denmark's Novo Nordisk NOVOb.CO and German dialysis specialist Fresenius Medical Care FMEG.DE . season is not great, but it's really the issue of the virus and the end of the lockdown, and sentiment towards that will push the market," said Francois Savary, chief investment officer at Swiss wealth manager Prime Partners.

China opened for the first time since Thursday and reversed early losses, sending its blue-chip index .CSI300 up 0.6%.

In a move seen by analysts as offering a olive branch to Washington amid bilateral trade tensions, China's central bank set the yuan CNY= at a broadly neutral midpoint. The exchange rate has been a contentious point in China-U.S. ties.

Spot gold XAU= dropped 1.3% to $1,684.25 an ounce.

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