Some parts of the world are slowly getting back to normal, with South Korean students returning to school, but there are worries about the long-term impact of the crisis on economies

London (AFP) - Stock markets diverged Wednesday as a two-day rally ran out of steam on profit-taking, with investor confidence tempered also by worries about the long-term damage coronavirus lockdowns are having on the global economy.

Equities have enjoyed a broad advance for several weeks as virus infection and death rates slow in badly hit countries, allowing governments to lift strict stay-at-home measures that have hammered businesses.

But, while there is a general feeling the worst is past, simmering China-US tensions and a slew of data highlighting the deep wounds being inflicted on economies continues to trouble trading floors.

The dollar fell against its main rivals Wednesday, while oil prices advanced.

The World Bank warned the crisis could leave about 60 million people in extreme poverty, adding that it saw the global economy contracting five percent this year.

Treasury Secretary Steven Mnuchin, meanwhile, said the US economy could endure “permanent damage” if lockdowns to keep COVID-19 from spreading drag on.

Monday’s news of promising results from early trials of a possible vaccine fired a surge across markets.

But that has been tempered by a report in Stat News – which focuses on health and medicine – that was sceptical of the announcement, saying it “revealed very little information” and no data about the treatment.

“We are being fairly cautious,” Shawn Matthews of Hondius Capital Management told Bloomberg TV. “If you look at the economy, it feels like it’s the summer of hope right now – where everyone is hoping it’s going to turn around.”

Tokyo ended 0.8 percent up, Hong Kong edged 0.1 percent higher, Sydney rose 0.2 percent and Mumbai added 0.9 percent, while there were also advances in Seoul, Taipei, Manila and Bangkok.

But Shanghai dipped 0.5 percent, Singapore shed 0.9 percent and Jakarta dropped 0.3 percent.

London, Paris and Frankfurt narrowly diverged in midday deals.

Investors were keeping tabs on Washington, where House Democrats have passed a $3 trillion aid bill, to add to a similar stimulus already agreed.

But Republican senators are unlikely to push it through, saying existing measures should first flow through the economy.

Analysts have warned that the deep divisions on Capitol Hill, particularly with elections in November, will likely mean a new deal cannot be expected any time soon.

Oil markets rose further, though with gains capped amid uncertainty about the economic outlook offsetting optimism over the lifting of lockdowns and crude output cuts by the world’s biggest producers.

- Key figures around 1145 GMT -

London - FTSE 100: UP 0.3 percent at 6,019.15 points

Frankfurt - DAX 30: UP 0.2 percent at 11,098.12

Paris - CAC 40: DOWN 0.5 percent at 4,436.18

EURO STOXX 50: UP 0.1 percent at 2,904.27

Tokyo - Nikkei 225: UP 0.8 percent at 20,595.15 (close)

Hong Kong - Hang Seng: UP 0.1 percent at 24,399.95 (close)

Shanghai - Composite: DOWN 0.5 percent at 2,883.74 (close)

New York - Dow: DOWN 1.6 percent at 24,206.86 (close)

Brent North Sea crude: UP 2.6 percent at $35.55 per barrel

West Texas Intermediate: UP 2.4 percent at $32.71

Euro/dollar: UP at $1.0962 from $1.0927 at 2110 GMT

Dollar/yen: DOWN at 107.58 yen from 107.66 yen

Pound/dollar: UP at $1.2261 from $1.2242

Euro/pound: UP at 89.39 pence from 89.15 pence