Global market sentiment has declined ahead of the latest US jobless claims data that is expected to show a massive spike in unemployment claims after businesses stateside shut down in an attempt to slow the spread of coronavirus.
Some experts suggest record unemployment numbers in the US, with Citi as the most bearish, projecting roughly four million claims.
The pan-European Stoxx 600 dropped 1.5 percent in early trade on Thursday, with basic resources tumbling 2.7 percent to lead losses as all sectors and major bourses plunged into negative territory.
Britain’s FTSE 100 index shed almost three percent at the opening bell in London. France’s CAC 40 is down by 2.4 percent, while Germany’s DAX slid 219 points or 2.3 percent.
Asia Pacific markets also stumbled earlier in the day, with Japan’s Nikkei closing down by almost five percent.
The slide in global stock markets comes despite Washington’s pledge of a massive $2 trillion aid package for the US economy to mitigate the impact of Covid-19. The nationwide lockdown outweighs the positive news due to the threat of prolonged business shutdowns and job losses.
“US initial jobless claims numbers are expected to be very, very large,” Paul Donovan of UBS Wealth Management was quoted as saying by the Guardian.
“If lots of Americans lose their jobs, the start of phase two (economic bounce-back) will be delayed. More unemployed means less consumption. Today’s data may have accuracy issues, if there were not enough people to process and count the number of claims,” he said.
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