NEW YORK -- Stock markets eased back on Thursday as worries that the world has not seen the last of the coronavirus pandemic caused investors to take some profits after a recent strong run.
US data showing 1.5 million workers filed for unemployment benefits last week -- only slightly less than the prior week -- added to jitters about the economic outlook.
In Europe, investors were underwhelmed by the Bank of England's latest monetary policy decisions, which undermined the pound and London stocks.
Wall Street finished little changed after a choppy session, as investors weighed weak economic data against optimism over the impact of monetary stimulus.
Art Hogan, chief market strategist at National Securities, described the market as being "in a bit of a stalemate" with worrisome economic and coronavirus trends offset by reassuring support from the Federal Reserve and hopes for coronavirus treatments.
Global markets were still "a bit cautious as uncertainty regarding a second wave of COVID-19 continues to simmer, countering recent economic data that has suggested improvement as economies reopen," said analysts at Charles Schwab.
Earlier, Asian equity indices had closed mixed after a 2-day rally.
The Bank of England on Thursday unveiled an extra £100 billion of cash stimulus to prop up Britain's coronavirus-hit economy, a figure in line with expectations, but analysts said the market had hoped for some forward-looking reassurance.
"BoE watchers could feel a little short-changed," said Kallum Pickering at Berenberg.
"The market had expected a clear signal that the BoE would ease policy significantly further at a later date or that the bank was seriously contemplating further expanding its toolkit in response to the COVID-19 mega-recession," he said.
While countries are slowly reopening their economies -- with flights resuming, bars, cafes and restaurants serving people and professional football returning -- new infections continue to surge in some places and are flaring up again in others.
Eyes are on Beijing, which has imposed new lockdowns, closed schools and banned flights again after the emergence of new clusters.
Meanwhile, hospitalizations have risen in Texas among other US states since Memorial Day, and California on Thursday required face masks in public indoor spaces following a jump in cases.
KEY FIGURES AROUND 2030 GMT (4:30 a.m. Friday in Manila)
New York - Dow: DOWN 0.2 percent at 26,080.10 (close)
New York - S&P 500: UP 0.1 percent at 3,115.34 (close)
New York - Nasdaq: UP 0.3 percent at 9,943.05 (close)
London - FTSE 100: DOWN 0.5 percent at 6,224.07 (close)
Frankfurt - DAX 30: DOWN 0.8 percent at 12,281.53 (close)
Paris - CAC 40: DOWN 0.8 percent at 4,958.75 (close)
EURO STOXX 50: DOWN 0.5 percent at 3,249.90 (close)
Tokyo - Nikkei 225: DOWN 0.5 percent at 22,355.46 (close)
Hong Kong - Hang Seng: DOWN 0.1 percent at 24,464.94 (close)
Shanghai - Composite: UP 0.1 percent at 2,939.32 (close)
West Texas Intermediate: UP 2.3 percent at $38.84 per barrel
Brent North Sea crude: UP 2.0 percent at $41.51 per barrel
Euro/dollar: DOWN at $1.1203 from $1.1244 at 2050 GMT
Dollar/yen: DOWN at 106.99 yen from 107.01
Pound/dollar: DOWN at $1.2422 from $1.2555
Euro/pound: UP at 90.18 from 89.55 pence
Agence France-Presse
HONG KONG - Equities and oil sank Friday while the dollar rallied as investors ran for the hills following the worst Wall Street rout since March, fuelled by worries about the economic recovery and a second virus wave in the US.
And the magnitude of the financial earthquake caused by the crisis was brought home by data showing the British economy shrank 20.4 percent month-on-month in April.
World markets have blasted higher since hitting a deep trough three months ago, supported by trillions of dollars in government and central bank help and an easing of lockdown measures.
But the optimism on trading floors was shattered Wednesday when Federal Reserve boss Jerome Powell signalled the world's top economy would take some time to bounce back from the crisis.
While his comments, and the bank's decision to keep interest rates at near zero for at least two years, was expected, the dose of reality jolted traders.
That coincided with figures showing a spike in new infections in key states including Texas, California, Arizona and Florida, which fanned concerns of a new wave as the nation slowly reopens.
However, Treasury Secretary Steven Mnuchin said there would be no more shutdowns, telling CNBC: "I think we've learned that if you shut down the economy, you're going to create more damage."
"Investors have been arguing in recent weeks that the stock market performance and economic reality have been disconnected, wondering when reality might hit the market," said JP Morgan Asset Management strategist Tai Hui.
"The fear of a rising rate of COVID-19 infections is the most important driver in our view for this sell-off."
Hong Kong, Sydney, Mumbai, Singapore, Jakarta and Bangkok all fell between one and two percent while Wellington and Seoul were more than two percent lower. Tokyo finished 0.8 percent lower and Shanghai was slightly off.
London opened more than one percent lower after the GDP figures were released, while Paris and Frankfurt were also lower.
Still, the losses were shallower than earlier in the day and much lighter than on Wall Street on Thursday, where all three main indexes were routed.
The correction that was needed?
Analysts also blamed profit-taking after the huge run-up since March, which has seen some indexes rise more than 50 percent, with many saying investors had run ahead of themselves on hopes for a V-shaped recovery.
"There is an argument to be made that equities were due a decent correction in light of the gains made in the past three months," said David Madden of CMC Markets.
"On the other hand, economies can't stay locked down forever so a jump in the infection rate is going to be the cost of trying to get things back to normal."
The world equities retreat was reflected in oil markets, with both main contracts tumbling more than eight percent Thursday, hit by uncertainty over demand and data showing a jump in US stockpiles.
And the losses continued into Friday, weighing on energy giants in the region.
The dollar, under pressure for weeks owing to the huge Fed easing measures and the return of risk-taking, rallied as investors sought its safe-haven status. The greenback was up more than one percent against the Canadian, Australian and New Zealand dollars as well as Indonesia's rupiah.
It also jumped more than two percent against the Mexican peso and South African rand.
"Who knows whether this is just the 'correction we had to have' or the start of something more serious," said National Australia Bank's Ray Attrill.
"Certainly though, we don't doubt the ongoing power of central bank policy actions -- from the Fed in particular -- in continuing to place a floor under risk assets relative to the underlying economic fundamentals on which stock prices are supposed to be based."
Agence France-Presse
