The pan-European STOXX 600 was down more than one percent during early trading, with all sectors and major bourses in negative territory. German DAX, France’s CAC 40 and Britain’s FTSE 100 were losing around one percent during afternoon trading on Friday.
Asian markets were also broadly lower, with South Korea’s Kospi Index leading the region’s losses, down 1.4 percent.
The global markets’ slump followed an announcement by drug maker Gilead that it has terminated a trial of Remdesivir early “due to low enrolment,” leaving it “underpowered to enable statistically meaningful conclusions.” The company said: “As such, the study results are inconclusive.”
Progress in combating Covid-19 “is not the same as returning the economy to the place it was last fall,” Hannah Anderson, a market strategist for JPMorgan Asset Management, told CNN. According to her, “investors should expect more volatility across all asset classes as we try to appropriately price in something we have never experienced before.”
Meanwhile, the EU announced on Thursday it is allocating a €3.3 trillion ($3.6 trillion) stimulus package to support the bloc’s economies, which are heading for unprecedented recessions as a result of the lockdown measures.
A source in the European Commission told TASS, the sum consists of €540 billion ($581 billion) of emergency program funding for restarting the European economy, €70 billion ($75 billion) of assistance from the budget of the European Union to European companies, about €2.45 trillion ($2.7 trillion) for soft loans and subsidies by member states to their businesses, as well as €330 billion ($355 billion) of tax incentives provided by countries to their companies.
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