World stocks were set to close their worst quarter since 2008, down more than 20%, while much of the world locked down to fight the coronavirus.
Stocks have rallied since the start of last week but remain down more than 20% for the quarter. European shares have had an even worst time, suffering their worst three months since 2002. Britain’s FTSE last endured such a drop in 1987.
But with policymakers responding with more than $10 trillion and counting of fiscal and monetary stimulus packages, a semblance of calm has returned this week. Brave investors bet the worst is behind them.
The MSCI world equity index, which tracks shares in 49 countries, edged 0.14% higher. It is down 21% for this quarter.
Finance ministers and central bankers from the Group of 20 major economies met by videoconference on Tuesday. This was a second meeting in just over a week, to discuss their response to the coronavirus pandemic and its impact on the global economy.
The number of coronavirus infections globally is heading towards 800,000. Health officials are cautious. A WHO official warned on Tuesday that even in the Asia-Pacific region the epidemic was “far from over”.
START TRADINGForex – Worst quarter for stocks since 2008
For the quarter, the dollar was the biggest gainer. Broader market gauges of dollar funding and market volatility declined from multi-year highs on Tuesday.
Against a basket of six other currencies, the dollar rose 0.7% to 99.88, climbing for a second day. It reached 102.99, its highest in more than three years, earlier this month as a global market selloff fuelled a rush for dollars. Dollar demand has ebbed, but analysts are still forecasting more dollar gains.
The dollar rose 0.7% to 108.60 yen on Tuesday.
While the Chinese yuan stood firm against the dollar, the risk-sensitive Australian dollar weakened, down 1.3% to $0.609.
The euro fell 1% to $1.0927.
The pound fell against the dollar on Tuesday as the U.S. currency gained strength due to its safe-haven properties amid the spread of the coronavirus. The sterling declined 0.7% lower at $1.2330. It was weaker against the euro as well, trading down 0.1% at 88.99 pence.
Oil prices rose off the 18-year lows hit on Monday after the United States and Russia agreed to talks to stabilise energy markets.
Brent crude was up 65 cents, or 2.86%, at $23.41 a barrel, after closing on Monday at $22.76, its lowest finish since November 2002. U.S. crude climbed 5.6%, to $21.38 a barrel, after closing Monday’s session at $20.09, its lowest since February 2002.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money