Global stocks mixed after Wall St hit by oil market turmoil

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BEIJING (AP) — Global stock markets were mixed Wednesday as oil prices edged lower amid anxiety about the coronavirus pandemic’s mounting economic damage.

London and Frankfurt opened higher. Shanghai gained and Tokyo retreated after Wall Street suffered its biggest decline in weeks.

Oil prices slipped further. The fall has rattled investors, who economists warned earlier were too optimistic, because it adds to evidence of the depth of a global downturn with factories idled and consumers ordered to stay home.

The plunge in oil prices “has stirred wider concerns of a sharp economic slowdown,” Hayaki Narita of Mizuho Bank said in a report.

Global oil demand is set to drop to levels last seen in the mid-1990s. Producers can’t slow their production fast enough. Storage tanks are running out of room.

In early trading, London’s FTSE rose 0.8% to 5,690.83 and the DAX in Frankfurt gained 1% to 10,358.34. The CAC 40 in France added 0.5% to 4,380.47.

On Wall Street, futures for the benchmark S&P 500 index and Dow Jones Industrial Average rose 1%. On Tuesday, the S&P 500 fell 3.1% and the Dow lost 2.7%.

In Asia, Tokyo’s Nikkei 225 fell 0.7% to 19,137.95. The Shanghai Composite Index closed up 0.6% at 2,843.98 after spending the day swinging between gains and losses.

The Hang Seng in Hong Kong added 0.4% to 23,893.36. The Kospi in Seoul rose 0.9% to 1,896.15 and Sydney’s S&P-ASX 200 was unchanged at 5,221.20. India’s Sensex rose 1.8% to 31,177.71. New Zealand’s main index rose 1.1% and Jakarta gained 1.5%. Singapore was down 0.2%.

The price of a barrel of the benchmark grade of U.S. oil to be delivered in June lost 28 cents to $11.29 in electronic trading on the New York Mercantile Exchange. It plunged 43% the previous session to $11.57.

On Monday, the price of a U.S. barrel to be delivered next month fell to below zero. That meant traders were paying others to take it off their hands so they wouldn’t need to find places to store the swelling surplus.

The price for oil to be delivered in June didn’t hit zero, partly because storage isn’t as pressing a problem.

Brent crude, the price standard for international oils, lost another $1.90 cents to $17.43 per barrel in London. On Tuesday, it fell 24.4% to $19.33.

“Global markets are struggling mightily with a temporary but overwhelming demand drop,” said Stephen Innes of AxiCorp in a report. He said the June contract also could “fall prey to storage infrastructure saturation.”

On Wall Street, 94% of stocks in the S&P 500 declined. That included winners in the new stuck-at-home economy. Netflix slipped 0.8% before it announced its quarterly results that included a 23% rise in global memberships.

Treasury yields fell further, indicating investors were shifting more money into bonds as a safe haven. The yield on the 10-year Treasury, or the difference between the market price and what a buyer will be paid if a bond is held to maturity, dropped to 0.55% from 0.62% late Monday.

Also Tuesday, the U.S. Senate approved a virus aid bill worth nearly $500 billion. It would provide more loans to small businesses and aid to hospitals.

Georgia’s governor, meanwhile, announced plans late Monday to allow gyms, hair salons and other businesses to reopen as early as Friday.

Still, economic data are bleak. A report Tuesday showed the steepest drop for U.S. sales of previously occupied homes since 2015.

Pessimists say the market’s rally has been overdone and that a premature reopening of the economy could lead to only more flareups of infections.

The dollar declined to 107.66 yen from Tuesday’s 107.68 yen. The euro gained to $1.0863 from $1.0853.