LONDON: Stock markets on both sides of the Atlantic retreated Friday as investors banked profits from the week’s rally sparked by massive government and central bank action to protect economies from the coronavirus.

“Today’s sell off is most probably a consequence of three days of strong gains and a paring of risk ahead of the weekend,” said Michael Hewson at CMC Markets UK.

He said it was “a welcome sight to see European stocks finish the week higher for the first time since mid-February, offering a welcome respite to some pretty battered portfolios.”

Oil markets saw another dismal day under the twin impact of the pandemic and an ongoing price war, with European benchmark Brent crude plumbing lows last seen in 2003.

On Wall Street, the Dow Jones index was down by more than 700 points in midday New York trading, while in Europe key indices were also deeply in the red at the close — although still booking solid weekly gains, some by double digits.

“European markets have pulled back... with caution being the order of the day after such a good rally,” said Neil Wilson, chief market analyst at trading group Markets.com.

“Stimulus efforts have calmed markets” this week, Wilson said.

Earlier, Asian stock markets had mostly managed to record more gains.

Support measures which the G20 said amounted to $5 trillion have given traders hope that the expected global recession will be sharp but short.

Even news that a record 3.3 million Americans claimed unemployment benefits last week — smashing the previous all-time high of 695,000 in 1982 — did little to derail a more sanguine attitude among investors.

Published in Dawn, March 28th, 2020