The closure of non-essential businesses across much of the United States has caused a record surge claims for unemployment benefits (SETH HERALD)

London (AFP) – US stocks shot higher at the opening bell on Thursday, brushing aside a record surge in unemployment benefit claims, as a massive stimulus plan advanced.

Meanwhile, European and leading Asian stock markets were back in the red as investors there once again focussed on the devastating economic fallout the coronavirus pandemic is expected to wreak.

In one of the latest indications of that impact, the US Labor Department said first time unemployment claims soared to 3.3 million last week — the highest number ever recorded.

That compares to 281,000 first-time filers in the prior week and blows away the previous record of 695,000 set in October 1982. 

“The key takeaway from the report is that it underscores for everyone how much worse the current economic situation is than anything else experienced in this modern age,” said market analyst Patrick O’Hare at Briefing.com.

“In a counterintuitive way, then, this jarring initial claims report could be the headline that was needed to ensure the House moves just as quickly as it can to pass the fiscal stimulus bill,” he said.

The House of Representatives is expected to vote on an unprecedented $2-trillion stimulus package as early as Friday.

Meanwhile, Federal Reserve Chairman Jerome Powell on Thursday said the US central bank would continue to “aggressively” pump liquidity into the economy, while acknowledging there would be a sharp downturn.

The dollar was down sharply against its main rivals.

Powell’s comments came as G20 leaders were to hold a summit by teleconference, with hopes they would provide a united front after the group of leading economies was accused of being too slow to address the crisis.

In Europe, stocks were lower after the international ratings agency S&P Global warned that the coronavirus will push Britain and the euro area into recession this year, with their economies expected to shrink by as much as two percent.

In afternoon trading, London shares were down 1.8 percent, while Frankfurt slid 1.7 percent and Paris 1.6 percent.

– Singapore contracts –

In Asia on Thursday, Tokyo’s main stocks index ended down 4.5 percent after surging by almost one fifth over the previous three days, while Hong Kong shed 0.7 percent and Shanghai eased 0.6 percent. 

Singapore lost more than one percent as the city-state said its economy contracted sharply owing to virus fallout.

Compared with the previous quarter, GDP dived 10.6 percent, as all sectors of the economy were battered.

“Singapore has kicked off the rounds of shockingly poor data,” said Cincotta. 

“The GDP contracted at an annualised rate of 10.6 percent, the fastest rate of contraction in over a decade. 

“This is merely giving us a taste of what’s to come. The job market across the globe is about to turn very ugly,” she added.

Despite the Singapore update, other Asian stock markets rose, notably those playing catch up after being closed Wednesday.

– Key figures around 1330 GMT –

London – FTSE 100: DOWN 1.8 percent at 5,583.89 points

Frankfurt – DAX 30: DOWN 1.7 percent at 9,710.17

Paris – CAC 40:  DOWN 1.6 percent at 4,362.89

Milan – FTSE MIB: DOWN 1.2 percent at 17,034.28

Madrid – IBEX 35: DOWN 1.1 percent at 6,869.30

EURO STOXX 50: DOWN 1.8 percent at 2,750.11

New York – Dow: UP 2.4 percent at 21,716.76

Tokyo – Nikkei 225: DOWN 4.5 percent at 18,664.60 (close)

Hong Kong – Hang Seng: DOWN 0.7 percent at 23,352.34 (close)

Shanghai – Composite: DOWN 0.6 percent at 2,764.91 (close)

Euro/dollar: UP at $1.0976 from $1.0883 at 2230 GMT

Dollar/yen: DOWN at 109.58 yen from 111.20 yen

Pound/dollar: UP at $1.2018 from $1.1890

Euro/pound: DOWN at 91.31 pence from 91.51 pence

Brent North Sea crude: DOWN 1.1 percent at $27.10 per barrel

West Texas Intermediate: DOWN 2.7 percent at $23.82 per barrel

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Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.