Boris Johnson infection and eurobond stalemate end three-day rally

US shares give up some gains but still head for best week in nine years

European shares closed in the red on Friday after the EU failed to agree on a coronavirus rescue package. Uncertainty resurfaced in the market, dragging shares lower and causing stocks to give up some of the gains of the previous day’s rally.


The Iseq ended the day almost 5.4 per cent lower, giving up some of the gains it had clawed back on Thursday as the coronavirus pandemic continued to grip Europe.

Hotel group Dalata continued its decline, losing 15.5 per cent throughout the session to end on €2.33. That followed a 4.8 per cent decline on Thursday. Ryanair saw its shares fall 4.7 per cent to €9.24.


Banks also took a hit, with AIB down more than 7 per cent to €1.117 and Bank of Ireland fell over 6.6 per cent to €1.95.

Building materials group CRH, the largest stock on the Dublin market, fell 5 per cent to €23.20, while Grafton was 8 per cent down on the day. Packaging group Smurfit Kappa also gave up some of its gains in the previous session to end the day at €24.52, an 8.1 per cent decline.


London's main share index fell sharply on Friday as prime minister Boris Johnson became the first world leader to test positive for coronavirus, which claimed more lives in Britain.

After a three-day surge driven by government and central bank measures to lessen the blow from the coronavirus crisis, the blue-chip FTSE 100 fell by 5.3 per cent to 5510.33 points. Losses accelerated after Mr Johnson’s announcement that he is self-isolating in London but would still lead the British government’s response to the pandemic.

Businesses also took a hit, with fashion chain Next slumping 11 per cent as it shut its online business, cutting off its remaining source of revenue. Carnival Corp slid 21 per cent, with traders pointing to news that the $2 trillion US aid package may exclude cruise liners not registered in the United States.


The pan-European Stoxx 600 index started the day about 2 per cent lower, and edged further to close down 3.3 per cent after the announcement of Mr Johnson’s positive Covid-19 test. The declines followed a three-day rally, and the index marked its best week since 2011.

With most of Europe practically under lockdown due to the virus, a recession appears imminent. EU lawmakers on Thursday extended the deadline for agreeing on a comprehensive economic rescue package by two weeks over a dispute between the ailing south and the fiscally conservative north.

A swathe of bumper stimulus measures from around the globe had bought about a modicum of stability in equity markets, prompting the three-day rally.

However, with the outbreak showing no signs of slowing, risk assets are likely due for more pain.

European carmakers were the worst performers on the day, shedding about 5.8 per cent. Volkswagen fell 7.3 per cent after its chief executive Herbert Diess said it may have to cut jobs if the pandemic is not brought under control, as the carmaker is still spending about €2 billion a week.

Travel and leisure stocks fell 5.8 per cent. Banks dropped 5.4 per cent as the European Banking Federation said they should halt 2020 dividend payments to preserve capital and continue to lend until the impact of the coronavirus epidemic is clearer.

New York

US stocks showed signs of fatigue after the fastest rally in nine decades, even as Congress passed the $2 trillion stimulus package meant to blunt the economic impact of the coronavirus.

The S&P 500 Index declined as much as 4 per cent Friday, giving back a portion of its 18 per cent surge over the previous three days. The equity benchmark is still headed for its best week in 11 years, though it remains 25 per cent off its February record. The Cboe Volatility Index, the so-called fear gauge or Vix, is on track for a 10th straight close above 60. It averaged 18.7 in the past year.

Investors had piled back into the battered US equity market this week on speculation that the unprecedented $2 trillion relief package would offset the pandemic’s economic damage.

A debate has ensued over whether that furious rally represented unwarranted optimism or the start of a long-term upswing. What remains clear is that the virus has ground the American economy to a virtual halt, with new jobless claims spiking above three million this week as large areas of the country remain virtually locked down to slow the spread of the infection.

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist