European stocks reversed earlier losses on Thursday even as a continued surge in coronavirus infections in the US raised fears of a prolonged global recovery from the pandemic.
Around 37,000 new cases were reported in the US on Wednesday, the highest daily total since April, with the worst of the outbreak concentrated in the south and west of the country.
The International Monetary Fund on Wednesday downgraded expectations for the global economy in 2020 and 2021, projecting negative growth for all regions of the world for the first time in the history of its forecasts.
Investors say the high number of cases in the US, the world’s largest economy, will further delay the already drawn-out recovery. Several states are imposing new restrictions and encouraging people to stay at home.
“Investors are pulling their heads in a little as the surge in cases raises concerns about how quickly the US economy can emerge from the ashes. There are also clusters in Germany of course but the focus is on the divergence between the European and US experience,” said Neil Wilson, the chief market analyst at Markets.com
The swings in Europe followed a broadly negative session for stocks in Asia.
Futures were pointing to a lower open for US stocks on Thursday.