(AP) — Stronger than anticipated Chinese economic data briefly shored up stocks on Tuesday, but a worrying increase in the number of Spanish deaths linked to the COVID-19 disease saw market sentiment sink back again.
The mood in markets seems tightly linked to evidence about the spread of the new coronavirus pandemic. That was evident with the news Tuesday that Spain saw a record 849 daily deaths of people who had contracted the COVID-19 disease.
Stock markets in Europe quickly shed a chunk of their gains. Germany’s DAX index was up only 0.6 at 9,874 having earlier traded nearly 3% higher. Britain’s FTSE 100 was up 0.8% at 5,610 while the CAC-40 in France fell 0.1% at 4,375. Wall Street was poised for modest declines at the bell with Dow futures and the broader S&P 500 futures down 0.2%. On Monday, both U.S. indexes closed up by more than 3%.
Before the Spanish death toll numbers, sentiment had been boosted by the strong Chinese data showing that the world’s second-largest economy was recovering after authorities relaxed anti-disease controls and allowed factories to reopen as the number of infections have fallen sharply.
The monthly official manufacturing purchasing managers’ index — a broad gauge of economic activity — rose to 52.0 points in March from 35.7 in February, while the equivalent index for the non-manufacturing sector spiked to 52.3 from 29.6. Anything above 50 indicates an expansion in activity, so the sharp rebound is welcome news in the markets even though it points to fairly tepid growth.
“Investors should be careful about drawing too many inferences from one figure, since one swallow does not a summer make,,” said Chris Beauchamp, chief market analyst at IG in London.
Since the height of the selling in markets a couple of weeks back, the mood has appeared to improve as governments and central banks use everything they can to contain the economic damage of the pandemic. The S&P 500, for example, is coming off its best week in 11 years, though it remains 22.4% below its record set last month, and oil tumbled to an 18-year low.
The number of known infections around the world has topped 780,000, according to Johns Hopkins University. The United States has the highest number in the world, more than 160,000.
Most people who contract COVID-19 have mild or moderate symptoms, which can include fever and cough. But for others, especially older adults and people with existing health problems, the virus can cause pneumonia and require hospitalization. More than 37,000 have died worldwide due to COVID-19, while more than 160,000 have recovered.