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European stocks fall as coronavirus pushes US jobless claims to record 6.6 million

Edmund Heaphy
Finance and news reporter
The American flag flies on Capitol Hill in Washington, Tuesday, March 17, 2020. (AP Photo/Susan Walsh)

Stocks fell on Thursday after new data showed that a record 6.6 million Americans filed for unemployment last week, up from the previous week’s record of 3.3 million.

The figure, which came in way ahead of analyst expectations, underlines the scale of the impact of the coronavirus crisis on the US economy.

Consensus estimates had suggested that 3.6 million people had filed an initial jobless claim with US state unemployment agencies in the week ending 28 March.

The pan-European STOXX 600 index (^STOXX) was down by around 0.6%. London’s FTSE 100 (^FTSE) erased its earlier gains.

Germany’s DAX (^GDAXI) was down by around 1%, while France’s CAC 40 (^FCHI) was 0.5% in the red.

Stocks nonetheless gained in the US on Thursday, suggesting that the increasingly dire economic data has already been priced in.

The S&P 500 (^GSPC) was up by more than 0.7%. The Dow Jones Industrial Average (^DJI) climbed by around 0.5%, while shares on the Nasdaq (^IXIC) were up by more than 0.4%.

Read more: Nearly a million people apply for universal credit in past two weeks

“The deterioration of the [US] labor market in the past two weeks almost defies belief. Since 14 March, approximately 3.8% of the working age population has filed for unemployment,” said Nick Bunker, an economic research director at jobs website Indeed.

“For context, during the Great Recession, the share of the population dropped 4.6 percentage points from December 2007 to December 2009. That took two years. The labor market is in a historic free fall,” he said.

(David Foster/Yahoo Finance)

Earlier, European equities had been boosted by a rebound in oil, after China said it would start buying oil for its state reserves and Saudi Arabia indicated it would support co-operation to stabilise prices. 

Crude oil (CL=F) was trading 9% higher at $22.16 per barrel. Brent (BZ=F) was up 10% to $27.28.

The US jobless figures came as the global number of coronavirus infections approached the one million mark.

“As we enter the fourth month since the start of the COVID-19 pandemic, I’m deeply concerned about the rapid escalation and global spread of infection,” said Tedros Adhanom Ghebreyesus, the director-general of the World Health Organization.

Read more: British Airways expected to furlough 36,000 staff

The losses in Europe followed a mixed trading session in Asia.

China’s SSE Composite Index (^SSEC) rose by almost 1.7% on Thursday, and the Hang Seng (^HSI) was up by 0.4% in Hong Kong at market close.

But Japan’s Nikkei (^N225) fell by around 1.4% and Australia’s ASX 200 (^AXJO) declined by almost 2%.

The KOSPI Composite Index (^KOSPI) in South Korea closed over 2.3% in the green.

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