World News

European stock index futures slide as more coronavirus damage revealed

(Reuters) – European stock index futures fell more than 3% on Wednesday as dismal economic data from Asia underpinned the ongoing damage from the coronavirus pandemic and fanned fears of a deep global recession.

Euro Stoxx 50 futures <STXEc1> tumbled 3.8% following a rebound this week that was powered by aggressive fiscal and monetary stimulus from around the world.

But figures on Wednesday showed factory activity contracting across most of Asia in March as the outbreak paralyzed supply chains, with sharp falls in export power-houses Japan and South Korea overshadowing a modest improvement in China.

“Though we may see bouncing PMI indices as ‘bad’ conditions ‘normalize’, the prospect for most economies’ manufacturing sectors as they head into (the second quarter) is for even more weakness,” said Robert Carnell, regional head of research, Asia-Pacific at ING.

The pan-European STOXX 600 index <.STOXX> ended Tuesday with its worst quarter in 18 years, losing about $2.8 trillion in market value, as lockdown measures to contain the health crisis upended business activity, raising the threat of corporate defaults and mass layoffs.

Profit for companies listed on the benchmark index is now expected to slide by a fifth in the second quarter, deepening a European corporate recession.

Commodities miner Glencore <GLEN.L> on Tuesday became the latest high-profile firm to defer a decision on its dividend pay out for this year, warning of material disruption to production.

With the outbreak still far from contained globally, U.S. President Donald Trump warned Americans of a “painful” two weeks ahead, with signs the U.S. death toll could stretch into the hundreds of thousands even with social distancing measures.

German DAX futures <FDXc1> were off 3.6%, while French CAC futures <FCEc1> fell 3.5%.

FTSE 100 futures <FFIc1> shed 3.7% as the number of deaths from the coronavirus in the United Kingdom rose by 27% in the space of a day.

(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Shounak Dasgupta, Bernard Orr)