Global stocks sink as Powell warning adds to second wave fears

• The negativity spilled over into Europe and approaching the half-way mark Thursday, London had lost 2.6 percent, Frankfurt slid 1.8 percent and Paris dropped 2.1 percent.

LONDON: World equities sank Thursday and the dollar traded mixed after Federal Reserve chief Jerome Powell warned of "lasting damage" to the economy from coronavirus shutdowns, stoking worries about a second wave of the deadly disease.

Oil prices meanwhile surged as the International Energy Agency said the easing of lockdowns and output cuts had helped the oil market after "Black April", when US prices collapsed into negative territory on evaporating demand and a vast supply glut.

In stock markets trading Thursday, Tokyo ended down 1.7 percent, Hong Kong shed 1.5 percent and Shanghai lost 1.0 percent -- one day after Wall Street slid for a successive session as a sustained rally for global equities ran out of steam.

The negativity spilled over into Europe and approaching the half-way mark Thursday, London had lost 2.6 percent, Frankfurt slid 1.8 percent and Paris dropped 2.1 percent.

"Sharp losses for US indices yesterday set the stage for Europe's weakness... as investors take heed from Powell's comments last night about the recession and its potential severity," said IG analyst Chris Beauchamp.

"If the chairman of the Federal Reserve is worried then it is time to sit up and take notice."

Powell warned of a "highly uncertain" outlook for the world's top economy, adding that lawmakers might have to provide even more stimulus to the $3 trillion already stumped up.

"The coronavirus has left a devastating human and economic toll in its wake," he said, warning that a deep, long recession "can leave behind lasting damage to the productive capacity of the economy".

Sentiment was also hit after the World Health Organization warned the virus "may never go away".

Signs of an easing in the outbreak globally had led to hopes for a slow return to normality but fresh infections in South Korea, China, Germany and other countries as they eased lockdowns have thrown a spanner in the works.

They came as US President Donald Trump's top virus expert Anthony Fauci warned against re-opening too quickly, saying it could cause a second wave of infections and hurt any economic recovery.

China-US relations were strained further Wednesday after two US security agencies said hackers were trying to steal research and intellectual property related to potentially lucrative COVID-19 treatments and vaccines.

They did not, however, provide evidence to back up the claims.

The allegation comes as the relationship between the two countries grows increasingly tense after a series of rows linked to Trump's accusations over Beijing's handling of the outbreak, and threats to hit China with fresh tariffs that have renewed trade war fears.

- Key figures around 1115 GMT -

London - FTSE 100: DOWN 2.6 percent at 5,753.16 points

Frankfurt - DAX 30: DOWN 1.8 percent at 10,349.62

Paris - CAC 40: DOWN 2.1 percent at 4,252.70

Milan - FTSE MIB: DOWN 2.2 percent at 16,801.76

Madrid - IBEX 35: DOWN 1.8 percent at 6,513.80

EURO STOXX 50: DOWN 2.0 percent at 2,753.72

Tokyo - Nikkei 225: DOWN 1.7 percent at 19,914.78 (close)

Hong Kong - Hang Seng: DOWN 1.5 percent at 23,829.74 (close)

Shanghai - Composite: DOWN 1.0 percent at 2,870.34 (close)

New York - Dow: DOWN 2.2 percent at 23,247.97 (close Tuesday)

Brent North Sea crude: UP 3.7 percent at $30.27 per barrel

West Texas Intermediate: UP 4.2 percent at $26.34

Euro/dollar: DOWN at $1.0812 from $1.0818 at 2100 GMT

Dollar/yen: DOWN at 106.85 yen from 107.03

Pound/dollar: DOWN at $1.2210 from $1.2232

Euro/pound: UP at 88.56 pence from 88.44 pence