Wall Street stocks ended sharply lower for a second straight day on Tuesday as investors expressed worries about a rout in the oil market and uncertainty over the coronavirus that overshadowed some progress on additional supportive measures for small businesses. The Dow Jones Industrial Average finished down 2.67%, the S&P 500 dropped 3.07%, and the Nasdaq Composite Index dipped nearly 3.5%. The negative sentiment was fueled by another disappointing report as sales of existing homes declined 8.5% in March, the biggest single-month decline in more than five years.
Today in Asia, stocks fared relatively well, with the panic in the oil market abating following a fall to record lows. China’s Shanghai Composite managed to reverse earlier losses and finished 0.60% higher, Hong Kong’s Hang Seng Index recovered by 0.42% while Japan’s Nikkei 225 retreated by 0.74% and registered two-week lows on Wednesday.
European equities opened on a positive note as oil prices started to show some signs of recovery. On the data front, the U.K. inflation fell in March amid tumbling oil prices and the coronavirus crisis. The CPI arrived at 1.5% higher than in March 2019. The pan-European Stoxx 600 climbed 1.17% during the session.
Meanwhile, dollar demand has abated somewhat, fueling a modest rise in the European currencies. EURUSD climbed to the 1.0880 area, remaining in a limited range since late last week. GBPUSD regained the 1.23 figure and extended gains to 1.2385 but is yet to recoup yesterday’s losses. USDJPY stays in a tight range, showing a modest bearish bias around 107.60.
Elsewhere, oil prices are making recovery attempts, with Brent clinging to the $23 handle after the IEA chief Fatih Birol said it may be advisable for OPEC+ to cut oil output further as soon as possible. On the other hand, Kremlin highlighted that they need to analyze the situation after global output cuts deal comes into effect. In other words, it looks like Russia is not going to do anything before then. Considering the lingering uncertainty and a gloomy outlook for global energy demand, Brent will likely remain in a bearish mode and may register fresh record lows in the days to come should the panic reemerge.