HONG KONG: US oil prices were set to end a historically bad week on a positive note, extending gains Friday owing to rising Iran-US tensions, though equities edged down following a series of crushing economic data.
As the rates of infection and deaths linked to the coronavirus show signs of easing in some countries thanks to draconian lockdowns, a fuller picture of the extent of its economic impact was beginning to emerge. Purchasing managers indexes — which gauge activity in countries´ factory and service sectors — came in at either lows not seen in decades or in history, highlighting the huge battle governments face in averting an extensive, painful depression.
The readings came as the US said 4.4 million people applied for unemployment benefits last week, taking the total virus-fuelled job losses in the country to more than 26 million. There was little major reaction to news that US lawmakers had approved nearly half a billion dollars in new stimulus, on top of the more than $2.2 trillion already passed. Adding to the downbeat mood was a Financial Times report that said initial trials of the remdesivir coronavirus drug being developed by Gilead Sciences had flopped.
The news was a blow to investors and while Gilead said it was still awaiting data from multiple studies of the drug, which has shown promise in some analyses, it sparked a sell-off on Wall Street with all three indexes ending virtually flat. That weakness seeped into Asia, which was on course for a weekly loss, having enjoyed two weeks of healthy gains caused by huge stimulus measures and hopes the disease was plateauing. “Beyond extraordinary policy support, the main reason for the strong recovery in risk sentiment is the unambiguous clarity of this recession´s driver compared to previous downturns that were more multi-branched and ostensibly more difficult to unwind,” said AxiCorp´s Stephen Innes.
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