* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* European stock markets lower
* Oil falls on oversupply worries
* China cuts medium term rates by 20 bps
* IMF flags worst global recession since 1930s
By Tom Arnold
LONDON, April 15 (Reuters) - Global stocks fell on Wednesday
as oil prices dropped and warnings of the worst global recession
since the 1930s underscored the economic damage done by the
coronavirus pandemic.
European stock markets faltered, with the pan-European STOXX
600 index down 1.9% after five days of gains fuelled by
suggestions the health crisis was ebbing and lockdown measures
may soon start to ease.
Much of the damage was felt by oil companies. Total SA
, Royal Dutch Shell Plc and BP Plc all
sank, pushing the European energy index to its lowest
this month as oil prices fell.
Benchmark Brent crude futures traded down 4% to
$28.46 after the International Energy Agency on Wednesday
forecast a drop in oil demand of 29 million barrels per day in
April, to levels not seen in 25 years. It warned no output cut
by producers could offset the decline.
Much economic damage has also already been done, with the
International Monetary Fund predicting the world this year would
suffer its steepest downturn since the Great Depression of the
1930s.
China earlier moved again to cushion its economy, cutting a
key medium-term interest rate to record lows, paving the way for
a similar reduction in benchmark loan rates, while reducing the
amount banks must hold as reserves.
Those moves are injecting a combined $43 billion into
world's second largest economy, but they failed to boost for
world shares. MSCI's All-Country World Index,
which tracks shares across 49 countries, was down 0.6%.
Focus is now starting to shift to the corporate results due
in the coming weeks. Signs of stress caused by the pandemic are
already widespread.
"A lot of good news has been priced in and we're due for
some consolidation, particularly as we head into earnings
season, as we all know the numbers will not be good," said
Francois Savary, chief investment officer at Swiss wealth
manager Prime Partners.
PERSISTENT WORRIES
Dutch navigation and digital mapping company TomTom
shed 2.7% after saying it expected negative free cash
flow this year and lower revenue from its automotive and
consumer businesses due to the pandemic.
London-based asset manager Jupiter Fund Management
dropped 5.6% after reporting an 18.3% drop in assets under
management in the first quarter as fears over the pandemic
rattled financial markets.
In the United States, E-Mini futures for the S&P 500
fell 1.8%, following a 3% rise in New York.
Bank of America Corp recorded a 48.5% fall in
quarterly profit as the bank set aside $3.6 billion for
potential loan losses tied to the coronavirus pandemic.
Even as some U.S. states considered relaxing restrictions,
the country's death toll rose by at least 2,228, a single-day
record, according to a Reuters tally.
President Donald Trump responded by saying some states could
still open shortly or even immediately. He also temporarily
halted funding to the World Health Organization, saying it
should have done more to head off the pandemic.
Italian bonds remained under pressure amid disappointment
over the half-a-trillion-euro plan to support coronavirus-hit
economies agreed by euro zone finance ministers last week.
Italy's two-year bond yield was last up 11 basis points at
0.95% after rising nearly 20 bps on Tuesday. Ten-year
yields were up 4 basis points at 1.83%.
The gap with Germany's 10-year bond yield, effectively the
risk premium Italy pays investors, continued to rise, to 225 bps
, retracing much of the tightening since the
European Central Bank announced emergency bond purchases in
mid-March.
In currencies, the dollar rebounded as concern persisted
that the damage to the global economy. The U.S. currency gained
across the board, particularly against currencies considered
riskier bets, such as sterling, where it was around 1% higher
.
Gold prices fell as investors locked in profits after recent
gains. It was last at $1,721 an ounce.
(Additional reporting by Wayne Cole in Sydney; graphic by
Ritvik Carvalho; editing by Larry King)
