Stocks extend losses, oil trades below $20 on virus impact

Oil below $20 a barrel

World markets started the week with more losses as countries reported surging numbers of infections from the coronavirus, forcing prolonged shutdowns of travel and business in many regions.

Shares fell in London, Paris and Tokyo on Monday but surged 7% in Australia after the government promised more recession-fighting stimulus. The U.S. contract for oil fell below $20 a barrel for the first time since 2002.

U.S. futures fluctuated overnight, with the future for the S&P 500 up 0.1% shortly before the start of trading on Wall Street, while that for the Dow industrials dropped 0.1%.

Hopes that a $2 trillion U.S. relief bill would ease the economic havoc brought by the pandemic did little to alleviate the gloom prevailing in many markets.

The pandemic relief bill approved by the Congress and signed Friday by President Donald Trump includes direct payments to households, aid to hard-hit industries like airlines and support for small businesses. Analysts expect markets to remain turbulent, however, until the outbreak begins to wane.

“Sentiment once again took a turn for the worse going into a week of reckoning by means of economic fundamentals," analyst Jingyi Pan of IG said in a commentary. “The rally seen for Wall Street last week may amount to little more but a relief rally with sentiment turning sour once again going into a fresh week."

The push to deliver financial relief has gained urgency worldwide as the outbreak widens. The number of cases in the U.S. has now surpassed those in China and Italy, climbing to more than 142,000 known cases, according to Johns Hopkins University. The worldwide total has topped 723,000, and the death toll has topped 34,000, while nearly 152,000 have recovered.

On Monday, Germany's DAX was down 0.2% at 9,613 while the CAC 40 in Paris lost 1% to 4,310. Britain's FTSE 100 declined 0.8% to 5,469.

Tokyo's Nikkei 225 lost 1.6% to close at 19,084.97, while the Kospi in South Korea was flat at 1,717.12. The Shanghai Composite shed 0.9% to 2,747.21, while the Hang Seng in Hong Kong slipped 1.3% to 23,175.11. Shares fell in Taiwan and Southeast Asia. India's Sensex fell 4.2% to 28,524.43.

Some investors have emerged to hunt for bargins as prices kept falling, said Francis Lun, CEO of Geo Securities in Hong Kong.

He views it as a bit too early.

“I think whatever rally you see, is really a false rally, it will be only a flash in the pan. It’s only temporary. Don’t go bottom fishing just yet because the worst is still to come," Lun said.

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