World stocks struggle as economies shrink sharply

LONDON: World stock markets were little changed on Friday after almost unremitting bad news of rapidly-shrinking economic activity, highlighting the “devastating impact” coronavirus has had on the global economy, analysts said.

A tweet from US Pres­ident Donald Trump suggesting delaying Nove­mber’s elections also jolted investors, helping send the euro soaring to a two-year peak at $1.1909 in early Asian deals.

Markets in Europe were digesting massive double-digit falls in economic output as well as a swathe of mostly grim corporate earnings which only further highlighted the damage done by the virus.

France’s economy contracted by a record 13.8 per cent in the second quarter, Spain slumped 18.5pc, Portugal contracted 14.1pc and Italy shrank 12.4pc.

Europe as a whole was hammered by its sharpest rec­orded contraction in the second quarter, with GDP down 12.1pc in the eurozone and 11.9pc across the full EU.

Gains in the techs helped provide some support but not enough to make a huge difference at the end of yet another turbulent week.

The tech-rich Nasdaq Comp­osite Index led the US market, adding 0.8 percent in early trade after tech gia­nts Amazon, Alphabet, Apple and Facebook all reported better-than-expec­ted results as the sector looks to be the big winner amid the pandemic upheaval.

Analysts had questioned whether tech shares could go higher still after the results came in, but Ama­zon, Apple and Facebook all won big gains early Friday, while Google-parent Alphabet fell.

Historic contractions

“GDP figures released today confirmed the devastating economic impact of the pandemic,” noted Oxford Economics analyst Rosie Colthorpe.

“Today’s GDP figures all showed historic contractions in output but that the pandemic has caused such massive economic damage is not a surprise.” The effect of Covid-19 on the US economy was even more marked than in Europe with a 32.9 percent contraction between

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