Global shares fall, weighed down by cheap oil and economic warnings

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.