Crude up again on Iran-US tension but virus impact hits stocks

Crude up again on Iran-US tension but virus impact hits stocks ... 24/04/2020 Economy

Keywords:#AFP, #American, #Asia, #Asset, #Brent, #Britain, #Donald_Trump, #England, #Euro, #Financial_Times,, #GMT, #Hong_Kong, #ING, #Iran, #Iranian, #London, #Manila, #New_York, #Nikkei, #North_Sea, #Purchasing, #Seoul, #Shanghai, #Singapore, #Sydney, #Taipei, #Tehran, #Times, #Tokyo, #Trump, #US, #Wall_Street, #Washington

Hong Kong (AFP)
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.
While the rate of infection and death of the deadly disease is showing signs of easing thanks to the lockdown of half the world's population, the extent of its impact on the economy 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. And the Bank of England warned of Britain's worst recession in centuries.
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 is 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.
And 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.
"The removal of a single recessionary input (the virus) via a vaccine or more effective treatment can pave the way for fast recovery in output. There's a lot of hope riding on a cure, and with optimism around remdesivir as top view on the healthcare section, it's a bit of blow for the market at week's end."
- 'Decisive response' -
Tokyo stocks ended the morning 0.8 percent lower, while Hong Kong shed 0.6 percent, and Shanghai and Seoul each dropped 0.7 percent.
Singapore and Manila dropped more than one percent, while there were also losses in Taipei and Jakarta, though Sydney rose.
JP Morgan Asset Management strategist Hannah Anderson warned that while news that some countries were moving to ease lockdowns and the virus was growing at a slower rate, there were still dangers ahead.
"It is important to not conflate medical and economic data," she said in a note. "Obviously a deceleration in infection rates is a positive development for the economy, but progress in combating this awful disease is not the same as returning the economy to the place it was last fall.
"Investors need to understand that the risks associated with lifting public health measures too early could further exacerbate market pain."
While stock markets were struggling, oil was enjoying another day of gains, with WTI up more than seven percent having surged around 20 percent on Thursday on the back of a new flare-up between Washington and Tehran.
Iran warned the US of a "decisive response" after Donald Trump said Wednesday that he had ordered the US Navy to destroy Iranian boats that harass American ships in the Gulf.
However, the gains in crude were unlikely to be sustained, observers warned, as storage facilities are near to bursting with demand almost non-existent -- a situation that sent the May contract for WTI to minus $40 this week.
"There is little in the way of fundamental developments to support the move higher, although given the amount of weakness recently, we were due a relief rally," said Warren Patterson and Wenyu Yao at ING.
"Renewed tensions between the US and Iran will likely be providing some support, but... this will likely be short-lived unless we see a further escalation."
- Key figures around 0240 GMT -
West Texas Intermediate: UP 7.1 percent at $17.67 per barrel
Brent North Sea crude: UP 4.8 percent at $22.36 per barrel
Tokyo - Nikkei 225: DOWN 0.8 percent at 19,272.42 (break)
Hong Kong - Hang Seng: DOWN 0.6 percent at 23,831.79
Shanghai - Composite: DOWN 0.7 percent at 2,817.58
Euro/dollar: DOWN at $1.0767 from $1.0775 at 2100 GMT
Dollar/yen: UP at 107.64 yen from 107.62 yen
Pound/dollar: UP at $1.2348 from $1.2344
Euro/pound: DOWN at 87.19 pence from 87.29 pence
New York - Dow: UP 0.2 percent at 23,515.26 (close)
London - FTSE 100: UP 1.0 percent at 5,826.61 (close)
--- ---

Read more from Source »

Related articles based on keyword density
Media Scam? Iran and America Join Hands in Waging “The Global War on T... 01/07/2014 Politics
By Prof Michel Chossudovsky Global Research, June 21, 2014 Following the incursion of jihadist rebels of the Islamic State of Iraq and the Levant (IS...View Details»

Middle East - Security Council debates ending UN sanctions on Iran ... 13/03/2015 News
Major world powers have begun talks about a UN Security Council resolution to lift UN sanctions on Iran if a nuclear agreement is struck with Tehran, ...View Details»

Iran’s volleyball snares historic Olympic berth after 52 years ... 05/06/2016 Sports
News ID: 3676230 - Sat 4 June 2016 - 16:02 Sports TEHRAN, Jun. 04 (MNA) – Iran national volleyball team beat Poland at the 2016 Olympic men’s volleyb...View Details»

'Nothing left' if Iran hit Saudi facility: FM Zarif ... 23/09/2019 Politics
War of words over Saudi oil attacks with the US continues as Iranian leaders arrive for the UN General Assembly. 23 Sep 2019 18:01 GMT Tensions in the...View Details»

ISIS: The Spoils of the "Great Loot" in the Middle East - FPIF... 02/07/2014 Politics
Adding yet more warfare to the current crisis in the Middle East will perpetuate exactly what the imperial powers set out to do: tear an entire region...View Details»