European markets turn to positivity despite IMF gloomy global forcast
European stocks turned positive during Thursday morning trade as investors digested the latest economic forecasts from the International Monetary Fund (IMF) and a record spike in coronavirus cases in the U.S
The pan-European Stoxx 600 was up 0.6% by mid-morning having earlier fallen more than 1.2% below the flatline. Autos added 1.8% to lead gains as almost all sectors swung into positive territory.
Global markets continue to digest the IMF’s latest forecast for the global economy and warning of soaring debt levels. On Wednesday, the IMF released its latest outlook in which it forecast a contraction of 4.9% in global gross domestic product in 2020, lower than the 3% fall it predicted in April.
The fund also downgraded its GDP forecast for 2021. It now expects a growth rate of 5.4%, down from a forecast of 5.8% made in April. The fund said that the downward revisions were due to social distancing measures likely remaining in place during the second half of the year, with productivity and supply chains being hit.
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