European stocks on Friday snapped a six-day losing streak, but made only a small gain over the course of the day as an initial rebound ran out of steam as COVID-19 sowed further economic turmoil.
The region’s stocks, which were earlier set for their best day since late 2008, swiftly pared gains after Spain declared a state of emergency over the pandemic, while reports that the US would follow suit added to the pain.
The benchmark STOXX 600 on Friday closed up 2.64 points, or 0.9 percent, at 299.16 following a record 11.5 percent plunge on Thursday. It was down 18.4 percent from 366.80 on March 6, its worst weekly drop since the 2008 financial crisis.
“These measures that governments are putting into place are just restrictions to movement — these are necessary measures, but nevertheless, they will have a significant economic impact, which the market is still coming to terms with,” London-based TS Lombard head of strategy Andrea Cicione said.
The STOXX 600, which sank into bear territory this week, has lost nearly one-third of its value from a peak hit in the middle of last month.
The week, which started with a shock crash in oil prices, followed by increasing signs of disruptions caused by the virus, saw selling pressure break through even the stimulus measures by several major banks.
Spanish stocks ended higher for the day as the bank-heavy IBEX was supported by higher eurozone bond yields. The index bounced back from a near eight-year low.
Italian stocks, which have been among the hardest hit as the country has been the worst-affected in Europe by the coronavirus outbreak, closed up 7 percent, recovering from a more than seven-year low.
Among the eurozone subsectors, resource stocks were the best performers for the day, bouncing back from a four-year low. Mining heavyweights Evraz PLC and BHP Group Ltd gained more than 12 percent each.
Swiss diagnostics maker F. Hoffmann-La Roche AG rose 3.2 percent after the US Food and Drug Administration issued emergency authorization for a faster coronavirus test made by the company.
Oil and gas stocks were the worst weekly performers. They fell almost 30 percent in their worst week ever in the wake of the oil price crash.
Travel and leisure stocks, which have also come under immense pressure from the outbreak, shed 25.1 percent for the week. The subindex also ended lower for the day, with British cinema operator Cineworld Group PLC sinking 30 percent amid continued concerns over the effects of the outbreak on its business.
Additional reporting by staff writer
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