European shares rise as investors bank on more stimulus By Reuters

2/2
© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt

2/2

By Sruthi Shankar

(Reuters) – European shares jumped on Tuesday as investors bet on more moves by major central banks and governments to counter the economic blow from the coronavirus outbreak, helping major stock markets recover from a hammering in the past week.

Following a 5% jump for Wall Street indexes on Monday, the pan-European STOXX 600 () gained 2.4%, with growth-linked shares including airlines Lufthansa (DE:), Air France (PA:) and EasyJet (L:) among the biggest gainers.

While a source at the Group of Seven said a midday conference call would not launch any immediate fiscal or coordinated monetary action to boost growth, a number of governments and central banks are gearing up to take action.

Australia’s central bank was the first to move, cutting interest rates to a record low on Tuesday, while those in Japan, Britain, France and the United States have all signalled willingness to inject more cash into the system.

British Prime Minister Boris Johnson was also set to unveil an action plan to tackle a spread of the virus and possible measures to support the health service, businesses and the economy.

The index is still trading 11% below the February peak, reflecting the scale of the hit investors expect from a still expanding epidemic. After a decade of cash injections from central banks, analysts also question if monetary stimulus will be enough this time round.

“We’re seeing monetary stimulus in a more coordinated fashion, but the question is really (on) the fiscal side,” said Edward Shing, global head of equity derivatives strategy at BNP Paribas (PA:).

“The problem is even if central banks lower rates or increases QE, that doesn’t get people to go down to the shops.”

All of Europe’s sub-sectors were up, and those that took a heavy hit over the past week such as miners (), technology () chemical producers () and travel & leisure index () rebounding the most.

Spanish banks shone after the European Court of Justice ruled that it will be up to local judges to decide on a case by case basis if IRPH mortgage clauses were abusive.

Caixabank SA (MC:), Bankia (MC:), BBVA (MC:) all rose between 3% and 6% over relief that the court did not decide a blanket rejection of the clause.

Among individual movers, German meal-kit delivery firm HelloFresh (DE:) jumped 7% after forecasting growth in 2020 revenue and core profit.

Qiagen NV (DE:) soared 19% to the top of STOXX 600 after U.S. firm Thermo Fisher Scientific (N:) launched a 10.4 billion euro ($11.6 billion) bid for the German genetic testing company.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Be the first to comment

Leave a Reply

Your email address will not be published.


*