Europe midday: Stocks move lower as WTI oil futures crater

Early gains for stocks across the Continent have evaporated amid a continued slide in US oil futures and as investors continue to monitor the news-flow around the Covid-19 pandemic.

Shares had started the day higher buoyed by news at the weekend regarding various European governments initiatives to begin gradually easing lockdown measures.

Commenting on the mood in markets, Michael Hewson at CMC Markets UK said that there was a "realisation that even if lockdowns are eased, it’s hardly going to be normal service resumed, something US investors appear completely oblivious to at the moment."

On the flip-side, a leading epidemiologist, David Nabarro from Imperial College, warned at the weekend that a vaccine for Covid-19 was not guaranteed.

Nevertheless, other reports pointed to progress being made in antibody therapies for Covid-19, including from Regeneron Pharmaceuticals, with effective treatments possible by fall if all went well.

Against that backdrop, as of 1200 GMT, the benchmark Stoxx 600 was trading 0.34% lower to 332.33, alongside a 0.54% drop to 10,567.93 for the German Dax while the FTSE Mibtel was 0.64% lower at 16,946.13.

In parallel, futures on West Texas Intermediate crude oil for delivery in May were crashing by 36.5% to $13.39 a barrel - its lowest since 1999 - ahead of their expiry on the next day and amid reports of burgeoning supplies in the States.

Yet front month Brent crude oil futures were down by just 3.4% to $27.12 a barrel on ICE, while the June WTI contract, while down by 7%, was trading at $23.25.

On the economic side of things, some of the news continued to be dire.

Spain's central bank forecast a contraction in the country's gross domestic product of between 6.8% and 12.4% in 2020, depending amongst other factors on how quickly containment measures could be rolled back and the damage done to businesses.

Despite such projections, the yield on the benchmark 10-year Spanish government bond headed eight basis points higher to 0.89%.

According to Eurostat, the euro area's seasonally adjusted foreign trade surplus widened from €18.2bn in January to €25.8bn in February, amid a slide in imports.

Producer prices in Germany fell at a year-on-year rate of 0.8% in March, down from 0.1% for February.