NEW YORK: Global stock markets sank on Friday following more signs that the Covid-19 pandemic would take a massive toll on economic growth, while oil prices continued to rally on hopes of a cut to global supply.

Investors sought out safe havens in the US dollar and government bonds, pushing U.S. Treasury yields near their lowest in three weeks.

US payrolls fell by the largest amount since March 2009, ending a record 113 straight months of job growth. Morgan Stanley said the US economy will shrink 5.5 per cent in 2020, the steepest drop since 1946, with a huge 38pc contraction predicted for the second quarter. In Europe, a number of firms flagged a hit to business from the pandemic caused by the new coronavirus, foreshadowing a deeper earnings recession ahead of the reporting season.

MSCI’s gauge of stocks across the globe shed 1.41pc following broad declines in Europe and Asia.

In midday trading on Wall Street, the Dow Jones Industrial Average fell 331.5 points, or 1.55pc, to 21,081.94, the S&P 500 lost 37.51 points, or 1.48pc, to 2,489.39 and the Nasdaq Composite dropped 104.43 points, or 1.39pc, to 7,382.89.

“Global recession fears are now being confirmed by the incoming economic prints,” said Han Tan, market analyst at FXTM.

Published in Dawn, April 4th, 2020