Stock markets around the world traded lower on Thursday, as US jobless numbers came in higher than expected and COVID-19 cases spiked in parts of Australasia.
About 1.3 million Americans filed for unemployment benefits over the last week, new figures showed, compared to expectations of 1.25 million.
The figure “cast a shadow” over stocks globally, according to Neil Wilson, chief market analyst at Markets.com.
“The mild risk-off tone to the start of the US session is keeping stocks in the red after a softer European session,” he said.
Sentiment wasn’t helped by a tough session for Asian markets overnight. China’s Shanghai Composite dropped (000001.SS) 4.5%, the Hong Kong Hang Seng (^HSI) dropped 1.6%, and the Shenzen Component (399001.SZ) fell by 5.3%.
It came despite better-than-expected Chinese GDP numbers. Economic output grew by 11.5% month-on-month in June, beating expectations of a 9.6% rise.
“A miss on retail sales data seems to be weighing on Chinese bourses even as Q2 GDP surprised on the upside,” Deutsche Bank strategist Jim Reid wrote in a morning note to clients. Chinese retail sales fell by 1.8% in June, against a forecast of 0.3% growth.
“The jump in COVID-19 infections in the region seems to also be acting as an overhang,” Reid said.
Overnight, Tokyo raised its alert level to its highest point after recording 280 new confirmed COVID-19 cases.
Elsewhere, Victoria — Australia’s second largest state — recorded 317 new cases in 24 hours, which was the biggest single day increase in any Australian state so far.
In Europe, the European Central Bank (ECB) kept interest rates unchanged and maintained its bond buying programme at the current level.
ECB President Christine Lagarde urged politicians to “quickly agree on an ambitious” rescue package for the EU, reiterating a message she has given over the last few months.
In the UK, unemployment figures came in better-than-expected. The headline unemployment rate remained at 3.9% even as employers shed 650,000 jobs since March.
Read more: ECB holds rates and bond-buying steady
Economists warned the numbers were likely disguising the true impact of the COVID-19 pandemic on the labour market.
“There’s little doubt that unemployment will rise over the coming months,” said James Smith, a developed market economist at ING.
Ladbrokes owner GVC (GVC.L) was the biggest faller on the FTSE 100. The stock dropped as much as 5% after the company announcing an 11% fall in first-half gaming revenue and the retirement of its chief executive.