European stocks closed higher on Wednesday in hopes that governments and central banks will take steps to lessen the impact of the coronavirus crisis after the surprise Federal Reserve rate cut.
The pan-European Stoxx 600
SXXP, + 1.36%
the index climbed 1.36% to 386.30 points, while the German
DAX, + 1.19%
up 1.2% and the French ACC
PX1, + 1.33%
After experiencing its worst week since the 2008 financial crisis – down 12.7% – the Stoxx 600 has now increased 2.7% this week.
What moves markets?
DJIA, + 4.53%
SPX, + 4.22%
COMP, + 3.85%
soaring after former Vice President Joe Biden won a series of Super Tuesday primary victories, taking over as head of Senator Bernie Sanders in the race for the Democratic nomination. The Dow Jones Industrial Average closed down 2.9% on Tuesday, despite an emergency rate cut by the Fed to protect the economy from the impact of the coronavirus. Fed intervention backfired on the US, dropping stocks on Tuesday, but hopes for central bank easing in Europe, along with other measures, helped boost European stocks at the start of the session.
CMC Markets analyst Michael Hewson said the stocks had climbed in the hope that governments and central banks “would offer tax incentives to small and medium-sized businesses to help them cope with the disruption.”
The World Bank also intervened overnight to pledge $ 12 billion to support countries facing the health and economic effects of the virus.
China has reported a further decline in the number of new daily cases of COVID-19 – the least since January 20 – but the virus has continued to spread to other countries, including the United States and South Korea.
A sharp drop in service sector activity in China – to record levels in February – has provided new clues to the overall economic impact of the virus.
The landmarks of Shanghai, Seoul and Tokyo all gained overnight.
Which stocks are active?
Shares fell 41% as the owner of the UK shopping center abandoned his intention to appeal to investors for emergency cash. The London-listed company had planned to raise up to £ 1.5 billion to consolidate its balance sheet after being struck by the collapse of several chain stores and the decline in the value of commercial properties.
German chip maker Dialog Semiconductor
climbed 5% before falling, Apple supplier said supply chains and manufacturers could return to normal in the second quarter. However, the company said the coronavirus would hurt business in the first quarter.