Stocks slide, on pace for worst quarter since 2008


NEW YORK (Reuters) – Global stock markets slid on Tuesday as investors continued to assess the economic damage from the coronavirus pandemic, leaving the MSCI benchmark of world equities on pace to finish its worst quarter since the financial crisis of 2008.

Stocks have rallied since the start of last week but remain down more than 20% since the start of the year. European shares are on pace for their worst three months since 2002, while Britain’s FTSE index is set for its largest drop since 1987.

In the U.S., the benchmark S&P 500 is set for its worst first quarter since 1938.

MSCI’s gauge of stocks across the globe .MIWD00000PUS shed 0.14% following modest gains in Europe and steep declines in Asia. The index is down 21% for the quarter.

In early trading on Wall Street, the Dow Jones Industrial Average .DJI fell 213.94 points, or 0.96%, to 22,113.54, the S&P 500 .SPX lost 25.35 points, or 0.97%, to 2,601.3 and the Nasdaq Composite .IXIC dropped 36.17 points, or 0.47%, to 7,737.98

Graphic: World Stocks IMAGE – here(1).PNG

“In spite of the significant sell-off of most growth-oriented assets since mid-February, we are concerned there is further downside ahead,” said Salman Baig, an investment manager at Unigestion.

“The violent market action should not be understated, but the underlying cause – an accelerating pandemic requiring large parts of the economy to shut down – is still with us.”

The number of coronavirus infections globally is heading towards 800,000. But Deutsche Bank analysts noted that for two consecutive days, the global growth in new cases was below 10%, after exceeding that for most of the past two weeks.

Health officials are much more cautious. A World Health Organization official warned on Tuesday that even in the Asia-Pacific region, the epidemic was “far from over”.

Government bond yields rose slightly, with U.S. benchmark 10-year notes US10YT=RR down 8/32 in price to yield 0.6947%, from 0.671% late on Monday.

Oil prices rose off the 18-year lows hit on Monday after the United States and Russia agreed to talks to stabilize energy markets.

Crude prices have been hit by a double whammy, with U.S. crude at one point falling below $20 a barrel on Monday, as the virus outbreak cut demand worldwide and Saudi Arabia got into a price war with Russia.

FILE PHOTO: Signage is seen outside the entrance of the London Stock Exchange in London, Britain. Aug 23, 2018. REUTERS/Peter Nicholls

Brent crude LCOc1 was up 65 cents, or 2.86%, at $23.41 a barrel, after closing on Monday at $22.76, its lowest finish since November 2002. nL4N2BO131

U.S. crude Clc1 climbed 5.6%, to $21.38 a barrel, after closing Monday at $20.09, its lowest since February 2002.

The dollar, measured against a basket of currencies, strengthened 0.4% to 99.652 =USD.

Reporting by David Randall; Editing by Bernadette Baum

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